US-Iran war sparks global oil shock and market panic

Key topics:Oil markets swing wildly amid US-Iran conflict and mixed messages.Strait of Hormuz disruption hits global supply; Gulf cuts continue.US, Israel escalate strikes; civilian and military casualties rise..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Hadriana Lowenkron and Jennifer A. Dlouhy.Energy markets whipsawed for a second consecutive day as investors raced to interpret rapidly shifting comments from the Trump administration over the war in Iran.Oil prices plummeted after Energy Secretary Chris Wright erroneously posted — and then deleted — a message that the US Navy had escorted an oil tanker through the Strait of Hormuz. White House Press Secretary Karoline Leavitt subsequently conceded no such operation had occurred, while adding the US military was “drawing up additional options” to address any attempt by Iran to constrain trade through the vital artery..Later Tuesday, President Donald Trump posted his own flurry of messages on social media. First, he insisted the US had “no reports” of mines being placed, but then urged Iranian forces to remove any explosives they may have laid. Next, Trump said the US was “using the same Technology and Missile capabilities deployed against Drug Traffickers” to target mining ships. Minutes later, the president reported that the US had “hit, and completely destroyed, 10 inactive mine laying boats” and promised “more to follow.”.Read more:.Oil market crisis deepens as gulf output slashed.Wright’s social media flub and Trump’s frenetic mine posts illustrated the scattered messaging that has frustrated observers in Washington and on Wall Street. Oil prices initially plummeted almost 20% after the energy secretary’s post, only to pare those declines as more information emerged.Oil then dropped after a Wall Street Journal report that the International Energy Agency proposed the largest release of reserves in history to tackle elevated prices. The wild fluctuations have seen Brent spike near $120 a barrel on Monday and drop as low as $81.16 on Tuesday..The conflict has spread across the Middle East and pushed the region’s energy giants to a crisis point. Retail gasoline and diesel prices have surged globally, becoming an election-year vulnerability in the US while prompting some Asian governments to restrict fuel usage.The critical Strait of Hormuz remains effectively closed to nearly all traffic. Saudi Arabia, Iraq, the United Arab Emirates and Kuwait have slashed production. And there’s little sign Hormuz can be opened quickly without at least a pause in hostilities. Saudi Aramco Chief Executive Officer Amin Nasser called the disruption “the biggest crisis the region’s oil and gas industry has faced.” Group of Seven leaders will convene Wednesday to discuss coordination to deal with the impact of the crisis in Iran, including rising energy prices, Canada’s Prime Minister Mark Carney said in a statement after a call with French President Emmanuel Macron.US officials signaled Tuesday that military operations were escalating against Iran and there was little chance of diplomatic talks, throwing cold water on Trump’s suggestion the day before that the conflict could be resolved soon. Leavitt said Tuesday that the US was moving to dismantle Iran’s missile production sites.“It’s the same question today that we had when we were negotiating with them — do they actually want to have a diplomatic solution here,” Trump’s special envoy, Steve Witkoff, said in an interview with CNBC. “So far, the evidence suggests no.”The Pentagon earlier in the day reinforced that message, saying the US and Israel were conducting their most intense day of attacks yet against Iran. “We will not relent until the enemy is totally and decisively defeated,” Defense Secretary Pete Hegseth said during a news conference. “We do so on our timeline and at our choosing.” Iran fired drones and missiles at targets across the Middle East as the conflict raged on.The biggest oil refinery at Ruwais in the United Arab Emirates halted operations after a drone strike caused a fire in the industrial area in which it’s located, according to people familiar with the matter. Abu Dhabi National Oil Co. was assessing damage at the plant, the people said.There were early signs at the start of the week that Iran’s attacks on some countries, including the UAE, were waning. Airlines in the Persian Gulf are slowly starting to increase flights even as countries continue to intercept missiles and drones. Even still, the UAE said overnight Iran had fired ballistic missiles toward its territory, while Saudi Arabia and Kuwait said they had intercepted drones from Iran. Sirens sounded in Bahrain.Iranian President Masoud Pezeshkian said Tehran is prepared to scale back the conflict “on the condition that the airspace, territory, and waters” of neighboring countries aren’t used to launch attacks on the Islamic Republic, according to the semi-official Mehr news agency.Pezeshkian made those remarks during a phone call with Turkey’s President Recep Tayyip Erdogan, following the interception of an Iranian missile in Turkish airspace by NATO’s air defenses on Monday. NATO is increasing air defenses in southeast Turkey, where the US operates a key radar supporting the alliance’s ballistic missile shield.Meanwhile, Australia, South Korea and the UK have helped to boost defenses of Gulf allies or are assessing requests to do so.More than 1,300 Iranians have been killed in the war so far, according to an official toll, although that number hasn’t been updated for several days. At least seven US servicemembers have died, and Leavitt confirmed Tuesday that around 150 had sustained injuries so far. Two Israeli soldiers and about a dozen civilians also have died, while several deaths have been reported in Gulf countries. Israeli forces maintained attacks on southern Lebanon on Tuesday, aiming to degrade Iran-aligned Hezbollah. Some 486 people have been killed in Lebanon, according to the nation’s health ministry. The US and Israel have been at odds over the latter’s attacks on Iranian energy infrastructure, according to a report from Axios that cited three sources familiar with the matter. US Senator Lindsey Graham this week had urged Israel to be cautious about the targets it selects to avoid crippling Iran’s future.Trump pledged during his election campaign not to allow the US to become involved in protracted foreign wars, and there’s a risk that more American casualties and sustained high gasoline prices will weigh on Republicans’ chances in November midterm elections. US lawmakers showed deep partisan division on the war Tuesday, as senators left a classified briefing with Pentagon officials..Read more:.US submarine strike ignites new front in Iran war.Democratic Senator Richard Blumenthal said “this briefing failed to provide any reassurance to me that we have clarified objectives or strategy and that we have an end game.” Republican Senator Mike Rounds, however, defended the administration, saying “the president made the right call on this one, and he was correct as to the threats involved.”Trump said Monday he could waive “certain oil-related sanctions to reduce prices” but didn’t offer specifics beyond acknowledging he had discussed the topic with Russian President Vladimir Putin. Moscow has faced a range of restrictions on its vast oil industry — a bid to deprive the country of revenue over its war in Ukraine.Leavitt said the increased energy costs are temporary and will go down after the operation in Iran ends. .© 2026 Bloomberg L.P.

US-Iran war sparks global oil shock and market panic

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