Oil prices dive as Iran's retaliation focuses on regional U.S. military bases
Oil prices slipped more than US$3, or 4 per cent, on Monday after Iran attacked the U.S. military base in Qatar in retaliation for U.S. attacks on its nuclear facilities, and took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz.
Brent crude futures were down US$2.91, or 3.8 per cent, at US$74.09 a barrel by 1:13 p.m. ET. U.S. West Texas Intermediate crude (WTI) eased US$2.8, or 3.8 per cent, to US$71.06.
Explosions were heard over Qatar's capital Doha on Monday, a Reuters witness reported, shortly after a Western diplomat said there had been a credible Iranian threat against the U.S.-run al Udeid air base in the Gulf Arab state since midday.
'Oil flows for now aren't the primary target and is likely not to be impacted, I think it's going to be military retaliation on US bases and/or trying to hit more of the Israeli civilian targets,' said John Kilduff, a partner at Again Capital.
Qatar said it closed its airspace, while United Arab Emirates' airspace was closed based on flight paths and air traffic control audio, according to Flightradar.
U.S. President Donald Trump said he had 'obliterated' Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.
Israel also carried out fresh strikes against Iran on Monday including on capital Tehran and the Iranian nuclear facility at Fordow, which was also a target of the U.S. attack.
At least two supertankers made U-turns near the Strait of Hormuz following U.S. military strikes on Iran, ship tracking data shows, as more than a week of violence in the region prompted vessels to speed, pause, or alter their journeys.
About a fifth of global oil supply flows through the strait. However, the risk of a complete shutdown is low, analysts have said.
A telegraphed attack on a well defended U.S. base could be a first step in reducing tensions provided there are no US casualties, Energy Aspects said in a post.
'Unless there are indications of further Iranian retaliation or escalation by Israel/the US then we may see some geopolitical risk premium come out of the price in subsequent days,' it said.
Qatar said there were no casualties from the attack on the U.S. military base.
Iran, which is OPEC's third-largest crude producer, said on Monday that the U.S. attack on its nuclear sites expanded the range of legitimate targets for its armed forces and called Trump a 'gambler' for joining Israel's military campaign against the Islamic Republic.
Meanwhile, Mr. Trump expressed a desire to see oil prices kept down amid fears that ongoing fighting in the Middle East could cause them to spike. On his Truth Social platform, he addressed the U.S. Department of Energy, encouraging 'drill, baby, drill' and saying, 'I mean now.'
Investors are still weighing up the extent of the geopolitical risk premium, given the Middle East crisis has yet to crimp supply.
HSBC expects Brent prices to spike above US$80 a barrel to factor in a higher probability of a Strait of Hormuz closure, but to recede again if the threat of disruption does not materialise, the bank said on Monday.
Iraq's state-run Basra Oil Company said international oil majors including BP, TotalEnergies and Eni had evacuated some staff members working in oilfields.
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Globe and Mail
14 minutes ago
- Globe and Mail
How Trump's Israel-Iran ceasefire agreement came together in a chaotic 48 hours
In a 48-hour whirlwind, President Donald Trump veered from elated to indignant to triumphant as his fragile Israel-Iran ceasefire agreement came together, teetered toward collapse and ultimately coalesced. Trump, as he worked to seal the deal, publicly harangued the Israelis and Iranians with a level of pique that's notable even for a commander-in-chief who isn't shy about letting the world know what he thinks. The effort was helped along as his aides, and Qatari allies, sensed an opening after what they saw as a half-hearted, face-saving measure by Tehran on Monday to retaliate against the U.S. for strikes against three key nuclear sites. And it didn't hurt that Israeli Prime Minister Benjamin Netanyahu, after 12 days of bombing, could tell the Israeli public that Iran's nuclear program had been diminished. 'This is a War that could have gone on for years, and destroyed the entire Middle East, but it didn't, and never will!' Trump declared in a social media post announcing the ceasefire. Israel-Iran ceasefire holds as Trump criticizes both sides for violations Opinion: The right and left have converged in their moral confusion on Iran The agreement began taking shape early Sunday morning, soon after the U.S. military carried out blistering strikes on Iranian nuclear sites that U.S. defence officials said have set back Tehran's nuclear program. Trump directed his team to get Netanyahu on the phone. The President told Netanyahu not to expect further U.S. offensive military action, according to a senior White House official who was not authorized to comment publicly about the sensitive diplomatic talks. The U.S. President made the case that it was time to stop the war and return to diplomatic negotiations with Iran. Trump also noted that the U.S. had removed any imminent threat posed by Iran, according to the official. For his part, Netanyahu listened to Trump's argument as Israel was nearing its own objectives with Iran, the official said. Netanyahu did not enthusiastically agree, but understood Trump's stance that the U.S. had no desire for additional military involvement. Around the same time, Trump special envoy Steve Witkoff spoke directly with Iranian Foreign Minister Abbas Araghchi, telling him to come back to the bargaining table because Iran had seen what the U.S. military could do and that it was capable of doing much more, the official said. Witkoff stressed that the U.S. wanted peace – and Iran should, too. Less than 48 hours later, Trump took to his social media platform to announce that a 'Complete and Total CEASEFIRE' had been achieved. The ceasefire was based solely on the end of military hostilities, rather than on additional conditions about Iran's nuclear program or its economic interests. Trump was acting on the belief that Iran's ability to develop nuclear weapons had been crippled. But as Trump spoke with confidence about the coming ceasefire, the Israelis and Iranians were notably quiet – neither side publicly commented on what Trump described as a deal that would be phased in over the coming hours. Araghchi spoke out first, acknowledging the wheels were in motion for a deal, but stopping short of saying Iran had signed off. 'As of now, there is NO 'agreement' on any ceasefire or cessation of military operations,' Araghchi posted on X. 'However, provided that the Israeli regime stops its illegal aggression against the Iranian people no later than 4 am Tehran time, we have no intention to continue our response afterwards.' Not long before Trump's announcement, Iranian Supreme Leader Ayatollah Ali Khamenei took to social media to declare that Iran wouldn't surrender. It was unclear what role Khamenei, the ultimate authority in the Islamic Republic's theocracy, had in the deal. And Netanyahu was silent. He would wait more than eight hours after Trump's announcement to confirm that Israel had accepted the ceasefire and that it had achieved its war goals against Iran. Qatar's Prime Minister, Sheikh Mohammed bin Abdulrahman Al Thani, said ceasefire efforts gained steam after Iran's retaliatory attack on a major U.S. base in the emirate on Monday evening. The Iranians fired 14 missiles at the base — with U.S. and Qatari defense systems knocking down 13. One of the missiles, according to Trump, was ''set free' because it was headed in a nonthreatening direction.' Trump also claimed the Iranians gave the U.S. and Qatar a heads up, allowing the troops to take shelter and the Qataris to clear their typically busy airspace. 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Montreal Gazette
16 minutes ago
- Montreal Gazette
This year's Fête nationale more meaningful than ever for some Quebecers
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Winnipeg Free Press
34 minutes ago
- Winnipeg Free Press
What's in and out of Trump's big bill as Senate races to meet Fourth of July deadline
WASHINGTON (AP) — President Donald Trump says 'NO ONE GOES ON VACATION' until the big, beautiful bill is on his desk by the Fourth of July deadline. And Republicans in Congress are staying put to get it done. The Senate is gearing up for weekend work, while House Speaker Mike Johnson told lawmakers Tuesday to keep their schedules 'flexible' as they prepare for more votes. 'We are making good headway,' said Senate Majority Leader John Thune, R-S.D. He expects the Senate will 'get it across the finish line' by the end of the week, sending it back to the House for swift action. But Republicans who have majority control of the House and Senate are finding that their push to move fast and change things — namely cuts to federal government programs including Medicaid and SNAP food stamps used by millions of Americans — is easier said than done. Not all GOP lawmakers are on board, and the Senate parliamentarian has advised that several key proposals violate procedural rules. 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Additionally, the House bill proposes $12 billion for the Homeland Security secretary to provide grants to states that help with federal immigration enforcement and deportation actions. The Senate package also provides the attorney general with $3.5 billion to create a similar state fund — called Bridging Immigration-related Deficits Experienced Nationwide, or Biden, referring to the former president. There's also money for the development of Trump's 'Golden Dome' missile defense system over the U.S., and quality of life measures for servicemen and women. And there are extras: One provision from the Senate would provide $40 million to establish Trump's long-sought 'National Garden of American Heroes.' How to pay for it? Cuts to Medicaid, SNAP, and green energy programs To help partly offset the lost tax revenue, Republicans are seeking to cut back some long-running government programs — Medicaid, food stamps and green energy incentives — basically unraveling the accomplishments of the past two Democratic presidents: Joe Biden and Barack Obama. Republicans argue they are trying to right-size the safety net programs for the population they were initially designed to serve — mainly pregnant women and children — and root out waste, fraud and abuse. The package includes new 80 hour a month work requirements for many adults receiving Medicaid and food stamps, including older people up to age 65. Parents of children older than 10 would have to work to qualify for food aid, and those with teens would have to comply with the work requirement for Medicaid. 'It's wildly popular,' Johnson said Tuesday, noting people can work, volunteer or go to school or job training programs. 'For heaven's sake, do something constructive.' Some 80 million Americans rely on Medicaid, which expanded under Obama's Affordable Care Act, and 40 million use the Supplemental Nutritional Assistance Program, and most already work, according to analysts. All told, the CBO estimates at least 10.9 million more people would go without health coverage, and 3 million more would not qualify for food stamps. Deeper SNAP cuts that would shift cost-sharing to the states were called into question by the Senate parliamentarian and undergoing revisions. And more Medicaid changes are up for debate — including a Senate plan to reduce the so-called provider tax that most states impose on hospitals and other entities. Key GOP senators and a coalition of House Republicans warn that lower Medicaid provider tax cuts will hurt rural hospitals. 'We cannot support a final bill that threatens access to coverage,' said 16 House GOP lawmakers in a letter to leadership. Senators are considering the creation of a new rural hospital fund, but the plan remains a work in progress. Both the House and Senate bills propose a dramatic rollback of the Biden-era green energy tax breaks for electric vehicles and also the production and investment tax credits companies use to stand up wind, solar and other renewable energy projects. All told, the cuts to Medicaid, food stamps and green energy programs are expected to produce some $1.3 trillion in savings over the decade, CBO said. What's the final cost? Altogether, keeping the existing tax breaks and adding the new ones is expected to cost $3.8 trillion over the decade, CBO says in its analysis of the House bill. The Senate draft is slightly higher. The spending cuts tally nearly $1.3 trillion. The CBO estimates the package from the House would add $2.4 trillion to the nation's deficits over the decade. Or not, depending on how one does the math. Senate Republicans are proposing a unique strategy of not counting the existing tax breaks as a new cost, because they're already 'current policy.' They argue the Budget Committee chairman has the authority to set the baseline for its preferred approach. Under the Senate GOP view, the cost of tax provisions would be $441 billion, according to the congressional Joint Committee on Taxation. Monday Mornings The latest local business news and a lookahead to the coming week. Democrats and others argue this is 'magic math' that obscures the costs of the GOP tax breaks. The Committee for a Responsible Federal Budget puts the Senate tally at $4.2 trillion over the decade. 'Current policy baseline' is a budget gimmick,' said Sen. Jeff Merkley, the top Democrat on the Budget Committee. 'This bill will add trillions upon trillions of dollars to the national debt to fund tax breaks for billionaires.' Trump, en route to Europe for a NATO meeting, told senators to lock themselves in a room if needed, and 'GET THE BILL DONE.' __ Associated Press writer Darlene Superville contributed to this report.
