Arabic version: ارتفاع أسعار النفط بعد خطاب ترامب حول النزاع الإيراني
Oil prices rose and shares fell after US President Donald Trump made a primetime televised speech about the Iran war on Wednesday. During the address from the White House, Trump said the US would hit Iran “extremely hard” over the next two to three weeks. He also called on nations that need oil from the Middle East to take the lead to keep the Strait of Hormuz open, arguing the US doesn’t need energy from the region.
According to BBC News, the strait is crucial to the global economy as around 20% of the world’s energy usually passes through the narrow shipping lane. It has been effectively shut since the conflict started as Iran retaliated to US and Israeli strikes with threats to attack ships using the waterway. The price of benchmark Brent crude was trading at about $100 (£75.50) a barrel before the president started speaking. After the address, Brent jumped by 6.5% to $107.70, while West Texas Intermediate oil rose 5.5% to about $105.70.
Market analysts noted that Trump’s speech lacked a “concrete timeline” for the reopening of the Strait of Hormuz, while a return to normal now looks “months away rather than weeks,” said Alberto Bellorin from InterCapital Energy. In urging other nations to step in, Trump has removed hopes that disruptions to global energy supplies will be resolved swiftly, Bellorin said. Trump has signalled that the war is likely to continue, prompting investors to expect that oil supplies will remain tight, said Tina Soliman-Hunter from Macquarie University.
In reaction to Trump’s address, major stock indexes in Asia fell sharply, reversing earlier gains. The Nikkei 225 in Japan was down by more than 2%, South Korea’s Kospi fell by 4.5%, and the Hang Seng in Hong Kong was 1.4% lower. The region’s stock markets have been volatile since the Iran war started at the end of February. Asia is particularly vulnerable to the impact of the conflict as it is heavily reliant on the Middle East for its energy supplies. Meanwhile, US stock futures were also down – pointing to a lower open for Wall Street on Thursday morning. Dow Jones and S&P 500 futures were around 1% lower, while Nasdaq futures were down by about 1.4%.
