Hopes dim for swift end to Iran war after Trump speech, oil prices surge anew
Hopes for a swift end to the Middle East war faded on Thursday after U.S. President Donald Trump vowed more aggressive strikes on Iran, disappointing investors hoping for clearer signals of a way out of the month-long conflict.
Stocks slid, oil prices surged and the dollar gained after Trump said military operations would be intensified in the next two to three weeks, offering no concrete timeline for ending hostilities that have sparked global energy supply chaos and threatened to send the world economy into a tailspin.
The Reuters Iran Briefing newsletter keeps you informed with the latest developments and analysis of the Iran war. Sign up here. “I can say tonight that we are on track to complete all of America’s military objectives shortly, very shortly,” Trump said in a Wednesday evening prime-time speech. “We’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages where they belong.” Trump also suggested the war could escalate if Iranian leaders did not give in to U.S. terms during negotiations, with strikes on Iran’s energy and oil infrastructure possible. Iran’s armed forces responded with a warning for the United States and Israel of “more crushing, broader and more destructive” attacks in store.
Ebrahim Zolfaqari, a spokesperson of the Khatam al-Anbiya central headquarters, said the war would continue until the “permanent regret and surrender” of Tehran’s enemies, according to a statement shared by Iranian media.
The chart shows brent crude oil price in USD per barrel
NO REASSURANCE ON ENERGY CRISIS
Benchmark Brent crude prices jumped about 6% to $107.69 per barrel, with little reassurance from Trump’s address about how the critical Strait of Hormuz energy conduit would reopen. Prices had fallen earlier on Thursday after settling lower in the previous session. Stocks took a hit, with U.S. index futures down 1.3% and European futures sinking over 2%. Almost all Asian bourses were in the red, with Japan’s Nikkei (.N225), down 2.4% and MSCI’s index of other Asia-Pacific shares down more than 2%. “If he (Trump) was trying to inspire confidence in the markets, he has not done that,” said Russel Chesler, Head of Investments and Capital Markets at Vaneck Australia. “The key question in all investors’ minds is ‘When is this going to be over?'” There was no let up in hostilities, with the Israeli military saying it had identified missiles launched from Iran toward Israeli territory. Saudi Arabia’s defence ministry said it had intercepted four drones on Thursday and Abu Dhabi said its defence systems had intercepted a missile near an economic zone, with minor damage caused. The U.S. embassy in Baghdad urged its citizens to leave Iraq, warning of attacks in the capital by Iran-allied militia in the next 24-48 hours. Trump in his speech mentioned what he called a short-term rise in domestic gasoline prices but said the U.S. did not need the strait and he challenged allies who rely on oil in the region to work towards reopening it. He blamed the higher costs on Iran’s “deranged terror attacks against commercial oil tankers”.
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NN: Iran’s only play is to get oil prices so high the world caves in. Trumps has no choice but to take control of the shipping lanes and return product to the market. Either way things are about to get very ugly. As in extreme disruption in oil supplies.
