For Markets, the Israel-Iran War Is Already Over
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International markets appear to have convinced themselves that the latest conflagration in the Middle East can be looked through as easily as all the region's other flare-ups of the last decade. Are they right to do so?
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News24
18 minutes ago
- News24
Oil climbs after Trump's Tehran warning, Sasol now up 80% since April
• For more financial news, go to the News24 Business front page. Oil prices jumped on Tuesday after US president Donald Trump call for Tehran residents to evacuate. Brent crude rose more than 1% to $74.15 a barrel. A month ago, it was trading close to $60. The synthetic fuels group Sasol's share price continued its surge from Friday. By late morning on Tuesday, it was trading at R99.43. It was trading at R87 on Thursday, before Israel's attacks on its regional foes. Its shares have now gained 80% since it reached its lowest level since the pandemic in April. Sasol has been grappling with the fallout of a disastrous US chemicals project, which resulted in a huge debt burden. After Friday's surge sparked by the attacks, crude ticked more than one percent lower Monday as traders bet that the conflict would not spread throughout the Middle East and key oil sites were mostly left untouched. Prices bounced back Tuesday after Trump called for the evacuation of the Iranian capital, which is home to nearly 10 million people. "Iran should have signed the 'deal' I told them to sign," he said on social media, referring to nuclear talks that were taking place. "What a shame, and waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!" Trump later poured cold water on remarks from French President Emmanuel Macron that he was leaving the G7 summit in Canada to discuss a possible ceasefire. Gains were tempered after the International Energy Agency said in its 2025 report that global demand would fall slightly in 2030 for the first time since the start of the Covid pandemic in 2020. It cited "below-trend economic growth, weighed down by global trade tensions and fiscal imbalances, and the accelerating substitution away from oil in the transport and power generation sectors". Traders are keeping a wary eye on developments in the Iran crisis, with the aircraft carrier USS Nimitz leaving Southeast Asia on Monday after cancelling a Vietnam visit as the Pentagon announced it was sending "additional capabilities" to the Middle East. Trump has maintained that Washington has "nothing to do" with Israel's campaign, but Iran's foreign minister said Monday the US leader could halt the attacks with "one phone call". Tehran has said it would hit US sites if Washington got involved. Meanwhile, Britain, France and Germany called on Iran to quickly return to the negotiating table over its nuclear programme, a French diplomatic source said. The US president had earlier said Iran wanted to make a deal, adding "as soon as I leave here, we're going to be doing something". He later left the gathering in the Rockies, telling reporters: "I have to be back as soon as I can. I wish I could stay for tomorrow, but they understand, this is big stuff." Tehran had signalled a desire to de-escalate and resume nuclear talks with Washington as long as the United States did not join the conflict, according to the Wall Street Journal. Rand recovers After briefly breaking through R18/$ on Friday, the rand strengthened to R17.8177 by mid-morning on Tuesday. The rand has lost half a percent of its value against the dollar over the past week. Equities were mixed in Asian trade, with Tokyo, Singapore, Seoul, Manila, Bangkok, Jakarta and Taipei all advancing, while Hong Kong, Sydney, Wellington and Mumbai struggled along with London, Paris and Frankfurt. The JSE's All-Share index was 0.3% lower, with Harmony (-3.9%), AngloGold (-3.4%) and Gold Fields (-3%) among the biggest losers. Dealers also kept tabs on the G7 summit, where world leaders pushed back against Trump's trade war, arguing it posed a risk to global economic stability. Britain, Canada, Italy, Japan, Germany and France called on the president to reverse course on his plans to impose even steeper tariffs on countries across the globe next month.
CNN
23 minutes ago
- CNN
Wall Street isn't freaking out about Israel and Iran yet. This could change their minds
Global markets have remained relatively calm amid the escalating tensions between Israel and Iran. But that sentiment could quickly shift, according to experts, if the conflict affects the Strait of Hormuz. That's because the Strait of Hormuz, a narrow stretch of water located between the coasts of Iran and Oman, is one of the most critical chokepoints in the world for the flow of oil. If oil exports are disrupted, or if Iran tries to block the strait, the global oil market could face an existential risk. The strait links the Persian Gulf to the open ocean and is a key channel for oil and liquefied natural gas exports from the Middle East to the global market. About 20 million barrels of oil flow through the strait each day, according to the US Energy Information Administration. Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, said a potential disruption at the Strait of Hormuz would cause oil prices to surge toward $100 per barrel. A functioning Strait of Hormuz is 'absolutely essential' to the health of the global economy, he said. There's always the lingering threat the strait will be blocked by Iran during the conflict, Thummel said, though he added Iran would face immense global backlash in such a case. About one quarter of the world's oil supply transits through the waterway, according to the International Energy Agency. 'Closure of the Strait, even for a limited period, would have a major impact on global oil and (natural) gas markets,' the IEA said in a report Tuesday. Traders have previously fretted about the strait during other Middle East conflicts. The price of oil fell on Monday after surging higher on Friday as traders bet oil would still flow during the current Israel-Iran conflict. West Texas Intermediate crude, the US oil benchmark, fell 1.66% and settled at $71.77 on Monday, while Brent crude, the global benchmark, fell 1.35% and settled at $73.23. Bob McNally, president at Rapidan Energy and former adviser to President George W. Bush, told CNN he thinks the risk of disruption to the production and flow of oil is a bit higher than what is being reflected in the market. 'I'm not as confident as the oil market seems to be that this is going to be over quickly or it's not going to expand to include oil and energy,' McNally said. 'My read is, this is still a serious situation.' The Joint Maritime Information Center, an organization focused on global shipping, said in a Monday notice that they are closely monitoring the situation. 'The number of transits through the Strait of Hormuz has shown a minor decrease in cargo carrying vessels,' the JMIC, a part of the Combined Maritime Forces, said in a Monday notice. 'The Strait of Hormuz remains open and commercial traffic continues to flow,' the notice reads. While any attempt by Iran to close the strait would send jolts through market, it's not the only risk, McNally said. A more concerning development would be an attack on oil processing facilities, such as Iran's 2019 attack on Aramco's Alqaiq processing plant. Analysts at RBC Capital Markets said while it would be difficult for Iran to close the Strait of Hormuz for an extended period of time, there are other avenues for the Israel-Iran conflict to disrupt maritime traffic and oil production. 'With the cascading attacks on gas facilities, oil depots, and refineries, energy is now clearly in the crosshairs of the Israel-Iran conflict, and we see the risk of a serious supply outage increasing significantly in an extended war scenario,' the analysts said in a Sunday note. Davide Accomazzo, a professor of finance at Pepperdine University's Graziadio School of Business, told CNN that a potential disruption in the Strait of Hormuz remains a 'big risk' for the price of oil. 'We just don't know exactly how this conflict is going to really proceed,' Accomazzo said. 'I think the market is still betting that this thing will remain contained, and it will not involve the US, it will not involve energy infrastructures, it will not involve the Strait of Hormuz,' he added. 'But it's a big question mark, absolutely. And it's one of those exogenous events that we may wake up one morning and boom, that has happened, and all of a sudden you have to deal with it.' Anna Cooban contributed reporting.
CNN
26 minutes ago
- CNN
Wall Street isn't freaking out about Israel and Iran yet. This could change their minds
Global markets have remained relatively calm amid the escalating tensions between Israel and Iran. But that sentiment could quickly shift, according to experts, if the conflict affects the Strait of Hormuz. That's because the Strait of Hormuz, a narrow stretch of water located between the coasts of Iran and Oman, is one of the most critical chokepoints in the world for the flow of oil. If oil exports are disrupted, or if Iran tries to block the strait, the global oil market could face an existential risk. The strait links the Persian Gulf to the open ocean and is a key channel for oil and liquefied natural gas exports from the Middle East to the global market. About 20 million barrels of oil flow through the strait each day, according to the US Energy Information Administration. Rob Thummel, senior portfolio manager at energy investment firm Tortoise Capital, said a potential disruption at the Strait of Hormuz would cause oil prices to surge toward $100 per barrel. A functioning Strait of Hormuz is 'absolutely essential' to the health of the global economy, he said. There's always the lingering threat the strait will be blocked by Iran during the conflict, Thummel said, though he added Iran would face immense global backlash in such a case. About one quarter of the world's oil supply transits through the waterway, according to the International Energy Agency. 'Closure of the Strait, even for a limited period, would have a major impact on global oil and (natural) gas markets,' the IEA said in a report Tuesday. Traders have previously fretted about the strait during other Middle East conflicts. The price of oil fell on Monday after surging higher on Friday as traders bet oil would still flow during the current Israel-Iran conflict. West Texas Intermediate crude, the US oil benchmark, fell 1.66% and settled at $71.77 on Monday, while Brent crude, the global benchmark, fell 1.35% and settled at $73.23. Bob McNally, president at Rapidan Energy and former adviser to President George W. Bush, told CNN he thinks the risk of disruption to the production and flow of oil is a bit higher than what is being reflected in the market. 'I'm not as confident as the oil market seems to be that this is going to be over quickly or it's not going to expand to include oil and energy,' McNally said. 'My read is, this is still a serious situation.' The Joint Maritime Information Center, an organization focused on global shipping, said in a Monday notice that they are closely monitoring the situation. 'The number of transits through the Strait of Hormuz has shown a minor decrease in cargo carrying vessels,' the JMIC, a part of the Combined Maritime Forces, said in a Monday notice. 'The Strait of Hormuz remains open and commercial traffic continues to flow,' the notice reads. While any attempt by Iran to close the strait would send jolts through market, it's not the only risk, McNally said. A more concerning development would be an attack on oil processing facilities, such as Iran's 2019 attack on Aramco's Alqaiq processing plant. Analysts at RBC Capital Markets said while it would be difficult for Iran to close the Strait of Hormuz for an extended period of time, there are other avenues for the Israel-Iran conflict to disrupt maritime traffic and oil production. 'With the cascading attacks on gas facilities, oil depots, and refineries, energy is now clearly in the crosshairs of the Israel-Iran conflict, and we see the risk of a serious supply outage increasing significantly in an extended war scenario,' the analysts said in a Sunday note. Davide Accomazzo, a professor of finance at Pepperdine University's Graziadio School of Business, told CNN that a potential disruption in the Strait of Hormuz remains a 'big risk' for the price of oil. 'We just don't know exactly how this conflict is going to really proceed,' Accomazzo said. 'I think the market is still betting that this thing will remain contained, and it will not involve the US, it will not involve energy infrastructures, it will not involve the Strait of Hormuz,' he added. 'But it's a big question mark, absolutely. And it's one of those exogenous events that we may wake up one morning and boom, that has happened, and all of a sudden you have to deal with it.' Anna Cooban contributed reporting.
