Futures on oil (OIL) drops 4% today despite Israel – Iran war and hard situation in the Middle East. According to two Iranian and other regional sources, Iran asked Qatar, Saudi Arabia and Oman to ask Donald Trump to press Israel to agree to an immediate ceasefire. Also, WSJ informed, citing sources that Iran signals it wants to de-escalate hostilities with Israel. Markets may interpret ate that fact as a signal of weakness or even losing war by Tehran.
- Markets see closing Ormuz strait as a low probability scenario, affecting not only the Gulf countries but also Iran export and China, which supported Iran military response. As for now, the USS Nimitz carrier strike group sailing toward the Middle East ahead of schedule.
- Also, broader Iran offensive against Israel faces also limited risk due to several factors such as possible Israeli nuclear weapon, strong support from the US and European countries, problems with crossing the Iraq and major economic collapse risk. According to media sources, Iran stated privately it will resume nuclear talks if the US will stay out of the fight.
Media reported also that the EU faces struggle to cut Russia oil price cap on Mideast risk and US opposition, according to diplomats. Oil opened today higher, at $77 per barrel, however, the commodity retreated almost 8% from that level until now.
Source: xStation5
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