IMF chief warns of broader risks from US strikes on Iran, after oil hits five-month high
Update:
Date: 2025-06-23T06:21:15.000Z
Title: Introduction: Oil dips back from five-month high amid Iran crisis
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price has hit its highest level since January, after the US bombed Iran's nuclear facilities over the weekend.
Traders are in a largely risk-off mood, as they weigh up the chances of further escalation in the Middle East, and ponder possible Iranian retaliations. But there's not a full-blown panic in the markets.
There was an early leap in the oil price when the new trading week began; crude prices surged over 4%, pushing a barrel of Brent crude to a five-month high of $81.40 per barrel.
But… it's slipped back even before traders in the City of London reached their desks, and is now up 1.7% at $78.32 per barrel.
Yesterday, Iran's parliament voted to shut down the Strait of Hormuz, though which a fifth of the world's oil is transported. If it happened, that could create a supply shock that drives up the price of energy, fuelling inflation and hurting growth.
In response, Marco Rubio, the US secretary of state, warned it would be 'economic suicide' for Iran to close the Strait, and urged China to sway Tehran on this point.
Rubio told Fox News:
'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil.'
Holger Schmieding, chief economist at Berenberg Bank, says the Strait of Hormuz is 'the key economic risk to watch'. But, he also argues that a protracted disruption to energy flows in the Gulf region 'seems unlikely', as trying to throttle energy exports would be a high-risk strategy for Tehran.
Schmieding told clients this morning:
For more than two decades, the Iranian regime has sought to destabilise various parts of the Middle East. On its own, a big setback to Iran's apparent attempt to acquire nuclear weapons should count as a positive.
In the short run, the US 'one off' strike against three Iranian nuclear facilities raises the geopolitical risks in the region to a new level. Markets will probably shift into 'risk off' mode as they await the Iranian response. In the long run, however, a severely weakened Iranian regime could turn into a significant positive for the region.
Today: UK government to publish its industrial strategy
9am BST: Eurozone flash PMI manufacturing and services survey for June
9.30am BST: UK flash PMI manufacturing survey and services for June
2pm BST: Christine Lagarde testifies to the Committee on Economic and Monetary Affairs of the European Parliament in Brussels
2.45pm BST: US flash PMI manufacturing survey and services for June
Update:
Date: 2025-06-23T06:24:22.000Z
Title: The US dollar has risen, a little, against a basket of currencies today as investors seek out safe haven assets.
Content:
The dollar index has gained 0.3% this morning, while the pound has slipped by 0.1% to $1.3433.
Carol Kong, currency strategist at Commonwealth Bank of Australia, said the markets are in wait-and-see mode on how Iran responds, with more worries about the positive inflationary impact of the conflict than the negative economic impact.
Kong explains:
'The currency markets will be at the mercy of comments and actions from the Iranian, Israeli and U.S. governments.
The risks are clearly skewed to further upside in the safe haven currencies if the parties escalate the conflict.'
Update:
Date: 2025-06-23T06:20:05.000Z
Title: IMF's Georgieva warns of growth risks from US strikes on Iran
Content: The head of the International Monetary Fund has warned that last weekend's US strikes on Iran could hurt global growth, if the consequence ripple beyond the energy markets.
Kristalina Georgieva told Bloomberg TV this morning that the Middle East crisis added to global uncertainty, explaining:
'We are looking at this as another source of uncertainty in what has been a highly uncertain environment.'
Georgieva said the IMF was watching energy prices closely, warning that a rise in oil prices could have knock-on economic impact. She says:
'There could be secondary and tertiary impacts. Let's say there is more turbulence that goes into hitting growth prospects in large economies — then you have a trigger impact of downward revisions in prospects for global growth.'
Georgieva is also hoping that energy supply routes will not be disrupted, saying:
'Let's see how events will develop.
I pray no.'
IMF's Kristalina Georgieva warned that the US strikes on Iran could potentially have broader impacts beyond energy channels, as global uncertainty escalates https://t.co/yqdC6u3HMF
Update:
Date: 2025-06-23T06:19:44.000Z
Title: Introduction: Oil dips back from five-month high amid Iran crisis
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price has hit its highest level since January, after the US bombed Iran's nuclear facilities over the weekend.
Traders are in a largely risk-off mood, as they weigh up the chances of further escalation in the Middle East, and ponder possible Iranian retaliations. But there's not a full-blown panic in the markets.
There was an early leap in the oil price when the new trading week began; crude prices surged over 4%, pushing a barrel of Brent crude to a five-month high of $81.40 per barrel.
But… it's slipped back even before traders in the City of London reached their desks, and is now up 1.7% at $78.32 per barrel.
Yesterday, Iran's parliament voted to shut down the Strait of Hormuz, though which a fifth of the world's oil is transported. If it happened, that could create a supply shock that drives up the price of energy, fuelling inflation and hurting growth.
In response, Marco Rubio, the US secretary of state, warned it would be 'economic suicide' for Iran to close the Strait, and urged China to sway Tehran on this point.
Rubio told Fox News:
'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil.'
Holger Schmieding, chief economist at Berenberg Bank, says the Strait of Hormuz is 'the key economic risk to watch'. But, he also argues that a protracted disruption to energy flows in the Gulf region 'seems unlikely', as trying to throttle energy exports would be a high-risk strategy for Tehran.
Schmieding told clients this morning:
For more than two decades, the Iranian regime has sought to destabilise various parts of the Middle East. On its own, a big setback to Iran's apparent attempt to acquire nuclear weapons should count as a positive.
In the short run, the US 'one off' strike against three Iranian nuclear facilities raises the geopolitical risks in the region to a new level. Markets will probably shift into 'risk off' mode as they await the Iranian response. In the long run, however, a severely weakened Iranian regime could turn into a significant positive for the region.
Today: UK government to publish its industrial strategy
9am BST: Eurozone flash PMI manufacturing and services survey for June
9.30am BST: UK flash PMI manufacturing survey and services for June
2pm BST: Christine Lagarde testifies to the Committee on Economic and Monetary Affairs of the European Parliament in Brussels
2.45pm BST: US flash PMI manufacturing survey and services for June
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