Shipping on High Alert in Mideast After US Strikes on Iran

The shipping industry was placed on high alert on Sunday with warnings that Tehran could retaliate against commercial vessels following after US airstrikes against Iran's nuclear facilities.
Greece, home to more oil oil-tanker capacity than any other nation, cautioned its ship owners to think again if considering entering the Persian Gulf in the wake of US airstrikes. Vessels planning to sail through the Strait of Hormuz, the waterway that sits at the mouth of the region, should 'reassess passage' until the situation normalizes, according to a circular, seen by Bloomberg that its shipping ministry sent to vessel owners. It advised waiting in nearby safe ports.

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26 minutes ago

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America's economy faces a potential war shock: Surging oil prices

The American economy faces the unwelcome prospect of reignited inflation after the United States launched strikes on three nuclear facilities in Iran. High oil and gas prices are a near certainty, experts say. The big question now: How long will the fossil fuels price spike last? Oil prices are expected to rise by about $5 per barrel when markets open Sunday night, according to experts. 'We are looking at $80 oil on the open,' said Andy Lipow of Lipow Oil Associates. US oil hasn't closed above $80 a barrel since January and has largely hovered between $60 and $75 a barrel since August 2024. Relatively tame oil prices have lowered gas prices to below $3 a gallon in many parts of the country, a major source of price relief for inflation-weary consumers. It's unclear if any major spike in oil prices will be sustained for a long period. Oil prices have risen about 10% since Israel's surprise attack on June 13 and then fell on Friday after US President Donald Trump announced a two-week deadline on whether to strike Iran. 'One shouldn't necessarily assume that just because the price of oil goes up, it's going to stay there. It doesn't,' said Joe Brusuelas, chief economist for the accounting firm RSM. The direction oil prices take is likely to depend on whether Iran's parliament decides to block the Strait of Hormuz, a key trade route that accounts for about 20% of the world's crude oil. On Sunday, Iran's Foreign Minister Abbas Araghchi said his country has 'a variety of options' when deciding how to respond to the US attacks and a prominent adviser to Iran's supreme leader has already called for the closure of the Strait of Hormuz. Bob McNally, president of consulting firm Rapidan Energy Group and former energy adviser to President George W. Bush, said that should Iran cut off the world's oil supply by closing the strait it would risk more military force from the United States and its allies. Iran could also attack infrastructure in the Persian Gulf that treats and exports oil and gas. 'It's possible they will decide the only thing that can dissuade President Trump is the fear of an oil price spike,' he said. 'They have to actually create that fear.' Appearing Sunday on Fox News, Secretary of State Marco Rubio called on China to prevent Iran from closing the Strait of Hormuz, adding that closing it would do more damage to other economies than the US economy. China buys a third of all oil that comes from the Persian Gulf, while the United States buys less than 3%. 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,' Rubio said. Rubio added that closing the strait would hurt other countries' economies more than the US economy. Meanwhile, American consumers may soon feel a price shock at the pump. 'It takes five days or so for stations to pass along the prices they see in one day. If oil markets do surge today and then tomorrow, it could start showing up at the pump in a matter of hours,' said Patrick De Haan, vice president of petroleum analysis at GasBuddy, a fuel tracking platform. According to Lipow, should the Strait of Hormuz be affected, the price of oil could rise to $100 a barrel, which would raise gas and diesel prices by about 75 cents per gallon from recent levels. Meanwhile, US trade policies combined with the war with Iran 'strongly suggest inflation will be moving faster and higher over the next 90 days,' according to Brusuelas. Many mainstream economists argue that the low inflation of the spring represents a calm before the summer storm, when they expect prices to rise because of Trump's tariffs. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Yahoo

34 minutes ago

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US strikes on Iran could hit American economy at a fragile time

The U.S. attack on Iranian nuclear sites over the weekend could ratchet up the pressure on an American economy that's turned increasingly fragile as a weekslong global trade war takes a toll. America's entry into what had been attacks between Israel and Iran is most likely to impact oil prices, investors said, which could ripple through the economy by causing higher transportation and gas prices, just as overall inflation throughout the economy has seemed to be contained. Energy analyst Rachel Ziemba told USA Today on June 22 oil prices may not trade much higher until and unless there's a sustained supply shock, like Iran deciding to block the crucial Strait of Hormuz. Iran's parliament on June 22 reportedly approved a measure endorsing exactly that, though whether it happens comes down to Iran's Supreme National Security Council. Ziemba calls that a 'low probability, high impact' risk – and one that commodities traders will likely struggle to price. That means energy prices may be volatile until conditions settle down – even as summer vacations start in earnest and a massive heat wave grips the central and eastern parts of the country. Any shock to financial markets and disruption of American consumers' expectations for the summer months comes as the overall economy is weakening quickly. "The world economy is not in a strong position to absorb another energy shock," warned Nigel Green, chief executive of deVere Group, a financial advisory firm. The U.S. joining the conflict between Israel and Iran raises the risks of a "sharp, global reaction," Green added. 'Investors are currently positioned for rate cuts, stable energy prices and an orderly global outlook," he said in a June 18 note. "A sudden and serious expansion of this conflict would force a violent repricing of risk across all major asset classes.' On June 18, the Labor Department reported that claims for unemployment insurance continued to rise. 'Uncertainty is leading companies to trim staff ahead of what could be a downturn in the economy. Batten down the hatches is what company executives are saying as the trade war and rumors of real war are starting to take a toll on the business outlook,' said Christopher Rupkey, chief economist with market research firm FWDBONDS LLC, in an email. Analysts at Oxford Economics take a more benign view. 'Rising Middle East tensions represent another adverse shock to an already weak economy,' they wrote on June 18. Their models suggest that oil prices at about $130 a barrel would pressure inflation to 6%. Post-pandemic inflation peaked at 9.1% in June 2022. That would put the Federal Reserve in a difficult position. The Fed raises interest rates to tame inflation, and cuts them to support borrowing and economic growth. So far this year, the central bank has held rates steady as it waits to see more information about how tariffs are playing out in the economy, but that may change. Federal Reserve chair Jerome Powell, speaking after the central bank held interest rates steady for the fourth consecutive meeting on June 18, told reporters the Fed is watching the situation in the Middle East, "like everybody else is." "What's tended to happen is when there's turmoil in the Middle East, you may see a spike in energy prices," Powell said prior to the U.S. strikes. "Those things don't generally tend to have lasting effects on inflation, although of course in the 1970s, they famously did, because you had a series of very, very large shocks. But, we haven't seen anything like that now." The U.S. economy is far less dependent on foreign oil than it was back in the 1970s, Powell added. This article originally appeared on USA TODAY: US strikes on Iran nuclear sites could hit weakening American economy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Forbes

an hour ago

• Forbes

It's Not The 1990's Gulf War

3 men reading local DAILY GAZETTE newspaper w. headline: WAR!, at Friendship House restaurant, on ... More morning after Operation Desert Storm began. (Photo by) The misdirection before the start of the weekend gave some of us optimists hope that the US would not soon bomb Iran's nuclear sites. If you did not check the news Saturday you were saved from wondering what might happen to the financial markets until Sunday morning. This had me going back into my memory banks and I first focused on the summer of 1990. The economy had been weakening in 1989-1990 in reaction to a restrictive monetary policy used to reduce inflation. There were many of other factors (more on the 1990 recession) as it was a global recession that impacted many countries more than the US. Dow Industrials 1990 The start of the 1990 Gulf War on August 2nd, 1990 is noted on the chart of the Dow Jones Industrials Average. I was also writing market commentary at the time and in early July I noticed bullish signs in the crude oil and gold futures as the Herrick Payoff Index had indicated that the money flow, as well as the volume, was positive. By the time of the invasion, I wondered if Saddam was a buyer in these two markets. The start and end of a recession are determined with a lag by the National Bureau of Economic Research. For example, the 1990 recession start date was determined in April 1991. The Dow Industrials made its low in October 1990 and by the time the Gulf War ended on February 28, 1992, the Dow was already up 20% from the lows. The bullish sentiment hit its lowest point in October 1990 which correlated with similar low readings during the stock market's decline in 2022 as well as the April 2025 lows. It is important to understand that I am not currently expecting a similar reaction in 2025 as the state of the economy as well as the supply-demand for crude oil is much different now than it was in 1990. The exchanges are also much different. In July 1990 crude oil rose from about $19 per barrel to over $40 by October. Crude Oil Weekly The weekly chart shows the surge in crude oil prices in the past two weeks as it has risen from $64.90 to $77.60 per barrel. The weekly starc+band is at $77.39 with the 38.2% Fibonacci retracement resistance at $83.93. This is calculated from the June 2022 high at $130.50. The 38.2% level is a reasonable upside target for the week ahead with the 50% retracement resistance at $92.82. There is long-term chart resistance at $97.19, line a. The on-balance volume moved above its WMA last week and has major resistance at line b. One of the indicators that I have found to be the most valuable for commodities is the Herrick Payoff Index developed by the late John Herrick. It uses volume, open interest, and price action to determine money flow. The HPI rose above its WMA at the end of May and surged sharply above the zero line three weeks ago. Markets For the week the increased tensions added more uncertainty which always makes the markets nervous. The Dow Jones Transportation Average was up 0.5% followed by a 0.4% gain by the iShares Russell 2000 (IWM). Both the NDX 100 and Dow Jones Industrial Average were unchanged while the S&P 500 was down 0.2%. On a year-to-date basis, the SPDR Gold Shares (GLD) is up 28.1% as the weekly HPI has indicated positive money flow in the gold futures since October 2023. The Dow Jones Transportation Average is down 7.1%. For the week on the NYSE, there were 1376 advancing issues and 1433 declining issues. SPY Weekly The Spyder Trust (SPY) has closed slightly lower for the past two weeks but is still up over 1% for June. The all-time high is at $613.23 (line a) with the yearly R1 at $638.09 and the weekly starc+ band at $645.41. The rising 20-week EMA at $577.26 is not consistent with a significant top. It would take a weekly close below the yearly pivot at $647.94 to turn the yearly pivot trend negative. The weekly S&P 500 A/D line has formed slightly lower highs over the past six weeks but it is still above its strongly rising WMA. It has already made new highs which does project new highs also for the SPY. The daily S&P 500 A/D is still below its MA as is the NYSE Stocks Only A/D while the NYSE All A/D line is still above its MA. For the last two days of the week, there were more New Highs than New Lows on the NYSE. Invesco QQQ Trust The Invesco QQQ Trust (QQQ) closed at $526.67 just 2.5% below the all-time high at $540.81. The yearly R1 is at $572.72 with the weekly starc+ band at $577.01. There is minor support initially in the $512-$516 area with strong support at $502.32 and the rising 20-week EMA. The NDX100 A/D line made another new high three weeks ago and is well above its rising WMA. The weekly relative performance RS is holding above its WMA and the resistance at line c. This indicates that QQQ is still leading the SPY and should continue to outperform. Over the past three months, QQQ is up 9.9% while SPY is up 5.4%. Bond Yields In 1990, the 10-year T-Note yield was in a well-defined long-term downtrend but had consolidated for a few months during the recession but then continued to drop. The current MACD analysis and last week's lower close d9es favor lower yields which is also true for the 2-year yield chart. Both should be favored by US and overseas investors as they look for safety. The weekly chart of the 30-year T-Bond yield shows the close above 5% and the 18-month resistance, line a. The initial upside targets from the breakout are in the 5.4-5.6% area. The week MACDs will point to higher yields with another close above 5%. The stock market is likely to be hit with some selling pressure on Monday but I would not expect to see more than a 1-2% pullback unless Iran takes action to block the shipping of oil. We could see 1-2 weeks of sideways to lower trading but the support at the 20-week EMAs should hold.