Fires and destruction after Iranian attack in southern Israel

Fires and destruction after Iranian attack in southern Israel
NewsFeed Fires and destruction after Iranian attack in southern Israel
Iranian missiles struck Beersheba in southern Israel for the second consecutive day, causing extensive damage to a residential block and hitting a technology park housing software giant Microsoft.

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Qatar Tribune

a day ago

• Qatar Tribune

Middle East tensions put investors on alert

Agencies New York Investors are mulling a host of different market scenarios should the US deepen its involvement in the Middle East conflict, with the potential for ripple effects if energy prices skyrocket. They have honed in on the evolving situation between Israel and Iran, which have exchanged missile strikes, and are closely monitoring whether the US decides to join Israel in its bombing campaign. Potential scenarios could send inflation higher, dampening consumer confidence and lessening the chance of near-term interest rate cuts. This would likely cause an initial selloff in equities and possible safe-haven bid for the dollar. While US crude prices have climbed some 10 percent over the past week, the S&P 500 has been little changed as of yet, following an initial drop when Israel launched itsattacks. However, if attacks were to take out Iranian oil supply, 'that's when the market is going to sit up and take notice,' said Art Hogan, chief market strategist at B Riley Wealth. 'If you get disruption to supply of oil product on the global marketplace, that is not reflected in today's WTI price and that is where things get negative,' Hogan said. The White House said on Thursday President Donald Trump would decide on US involvement in the conflict in the next two weeks. Analysts at Oxford Economics modeled three scenarios, ranging from a de-escalation in the conflict, a complete shutdown in Iranian production, and a closure of the Strait of Hormuz, 'each with increasingly large impacts on global oil prices,' the firm said in a note. In the most severe case, global oil prices jump to around $130 per barrel, driving US inflation near 6% by the end of this year, Oxford said in the note. 'Although the price shock inevitably dampens consumer spending because of the hit to real incomes, the scale of the rise in inflation and concerns about the potential for second-round inflation effects likely ruin any chance of rate cuts in the US this year,' Oxford said in the note. The biggest market impact from the escalating conflict has been restricted to oil, with oil prices soaring on worries that the Iran-Israel conflict could disrupt supplies. Brent crude futures have risen as much as 18% since June 10, hitting a near five-month high of $79.04 on Thursday. The accompanying rise in investors' expectations for further near-term volatility in oil prices has outpaced the rise in volatility expectations for other major asset classes, including stocks and bonds. But other asset classes, including stocks, could still feel the knock-on effects of higher oil prices, especially if there is a larger surge in oil prices if the worst market fears of supply disruptions come true, analysts said. 'Geopolitical tensions have been mostly ignored by equities, but they are being factored into oil,' Citigroup analysts wrote in a note. 'To us, the key for equities from here will come from energy commodity pricing,' they said. US stocks have so far weathered rising Middle East tensions with little sign of panic. A more direct US involvement in the conflict could, however, spook markets, investors said.

Qatar Tribune

a day ago

• Qatar Tribune

Oil prices down as US sanctions ease fears of escalation in Iran

Oil prices fell on Friday after the U.S. imposed new Iran-related sanctions, signaling a diplomatic approach that boosted hopes for a negotiated resolution. The move came after President Donald Trump said he could take up to two weeks to decide on U.S. involvement in the Israel-Iran conflict. Brent crude futures settled down $1.84, or 2.33%, to $77.01 a barrel. U.S. West Texas Intermediate crude for July dropped 21 cents, or 0.28%, to close at $74.93. Brent rose 3.7% on the week, while front-month U.S. crude futures increased 2.7%. The Trump administration issued fresh Iran-related sanctions, including on two entities based in Hong Kong, and counter-terrorism-related sanctions, according to the U.S. Treasury Department website. The sanctions target at least 20 entities, five individuals and three vessels, according to Treasury's Office of Foreign Asset Control. Although a major escalation is yet to occur, risks to supply from the region remain high, still hinging upon the potential for U.S. involvement. Iran in the past has threatened to close the Strait of Hormuz, a vital route for Middle East oil exports. Oil exports so far have not been disrupted and there is no shortage of supply. Elsewhere, the EU has abandoned its proposal to lower the price cap on Russian oil to $45, Bloomberg reported. U.S. energy firms this week cut the number of oil and natural gas rigs operating for an eighth week in a row for the first time since September 2023. Asian spot LNG prices at 4-month high on supply concerns Asian spot LNG prices rose to their highest level in four months this week on concerns over disruptions to supply due to the Israel-Iran conflict. The average LNG price for August delivery into north-east Asia was at $14.00 per mmBtu, up 11% from $12.60 per mmBtu last week and the highest level since February 21, industry sources estimated. Israel began attacking Iran last Friday, saying Tehran was on the verge of developing nuclear weapons. Iran, which says its nuclear programme is only for peaceful purposes, retaliated with missile and drone strikes on Israel. Prices have risen sharply over the last few days as traders are pricing in potential supply disruptions in the Middle East and war premiums are going up as the conflict carries on. There has not been any significant disruption to physical LNG cargoes so far, however, some buyers could bid higher relative to European buyers to attract Atlantic basin cargoes due to disruption at Hormuz. In Europe, gas prices at the Dutch TTF hub eased on Friday after hitting a fresh 11-week high on Thursday but remain volatile. TTF price settled at $13.82 per mmBtu. The U.S. arbitrage to north-east Asia via the Cape of Good Hope is now more strongly pointing to Europe, while the arbitrage via Panama continues to point to Asia. In the LNG freight market, Atlantic rates recorded its largest week-on-week increase since October 2023 at $49,750 per day on Friday, while Pacific rates remained steady at $32,000 per day. — By The Al-Attiyah Foundation

Al Jazeera

a day ago

• Al Jazeera

What is the cost of the war between Israel and Iran?

Continuing strikes from both countries are draining their economies. Israel and Iran are in the second week of the conflict. As well as inflicting damage, both countries are putting their economies under strain. Israel has spent billions of dollars on its war on Gaza and has upped its spending considerably with its largely air-based attacks on Iran. Iran was already struggling with the years of sanctions and now its oil and gas facilities are being hit. So can the two nations sustain the conflict? Which is likely to be worst affected? And will the conflict eventually damage the global economy? Presenter: Neave Barker Guests: Aly-Khan Satchu – Geoeconomic analyst and investor Eyal Winter – Professor of economics at the Hebrew University and Lancaster University Nader Habibi – Professor of practice in the economics of the Middle East at Brandeis University