Never bet against Donald Trump? The oil market appears to have made a risky wager from day one of the Iran war: The U.S. president would not allow the conflict to spiral into a full-blown economic crisis. So traders wouldn’t price one in, no matter what was happening with physical supplies.
Tag: ROI: Reuters Open Interest
The Iran war’s disruption to global crude oil and LNG markets is already being measured in lost barrels and higher prices. Now, with a U.S.-Iran peace deal expected to reopen the Strait of Hormuz, the reckoning begins: was this a watershed moment, or merely another blip?
The U.S.-Iran deal ending months of fighting and reopening the Strait of Hormuz will prompt a collective sigh of relief from energy exporters and importers alike. But the fragile calm may not prevent future flare-ups, casting doubt over how quickly – or fully – tanker traffic through the vital waterway can return to normal.
With the media frenzy surrounding the public listing of Elon Musk’s SpaceX sizzling, there’s a serious risk that investors piling into the world’s largest IPO will get burned – especially the retail crowd.
Saudi Arabia and neighbouring Gulf producers will cheer the eventual reopening of the Strait of Hormuz, but the ensuing flood of oil risks eroding OPEC’s already fragile grip on the market.
The biggest oil supply shock in decades has entered its fourth month – with no resolution in sight as neither the U.S. nor Iran appears willing to budge – yet the market has settled into an eerie calm. This disconnect reflects an uncomfortable reality: the biggest drivers of today’s energy market are a host of unknowns.
The trickle of tankers exiting the Strait of Hormuz has gathered pace in recent weeks, as traders adopt stealth measures to make the crossing. While this is freeing some of the vast oil inventories trapped in the Gulf, it does not signal a slow return to normalcy. Instead, it previews the opaque, fragmented energy market the Iran war is set to leave in its wake.
The Iran energy story may be masking a bigger inflation worry. The AI boom is building a head of steam in prices under the surface, and it’s a boom that will likely outlast any hiatus in the Gulf.
Investors are piling into South Korea and Taiwan for semiconductor stocks, but the AI boom isn’t just fattening profits at North Asia’s chip champions. It is powering a broader economic resurgence, driven by stronger household consumption, rising investment and widening tax coffers.
A gap is widening between two key measures of underlying U.S. inflation. Unfortunately for newly confirmed Federal Reserve Chair Kevin Warsh, the one rising faster is the central bank’s preferred gauge, further squashing any hope for interest rate cuts.