Oil prices soar, stocks slide after Israel strikes Iran
Oil prices surge
Oil futures skyrocketed more than 13 percent at one point before settling to gains of around seven percent, reigniting concerns about a renewed spike in inflation.
Stock market reaction
Following a downturn in Europe and Asia, Wall Street indices remained in the red throughout the day, finishing down more than one percent. Art Hogan, chief market strategist of B. Riley Wealth, noted, "After having a pretty solid run in May and the first part of June, markets found an excuse to take some profits."
Airline shares drop
Shares in major airlines plummeted as flights around the Middle East were suspended, further impacting market sentiment.
Safe-Haven assets rise
The dollar climbed higher, while gold, a safe haven investment, approached its record high of over $3,500 an ounce, having increased by around 30 percent since the year's start. David Morrison, senior market analyst at Trade Nation, remarked that the drop in equities and rise in safe-haven assets highlight the fragility of market sentiment amid geopolitical events.
Escalating tensions
On Friday, Iran launched ballistic missiles at Israel in retaliation for Israeli strikes targeting its nuclear facilities. Prime Minister Benjamin Netanyahu warned of "several waves of Iranian attacks" in response, with smoke seen rising above Tel Aviv.
Market sentiment
Despite a negative day for equities, analysts described the selling as orderly. Steve Sosnick of Interactive Brokers noted, "Investors are paring back some risk, but this is hardly a panicky sell-off," indicating a cautious wait-and-see approach among investors.
Implications for oil prices and inflation
Matthew Ryan, head of market strategy at Ebury, stated that further escalation could disrupt Iranian oil production, raising oil prices and complicating the decisions of major central banks regarding interest rates. Rising oil prices could weigh on global growth and maintain inflationary pressures for longer.
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Middle East Eye
2 hours ago
- Middle East Eye
Jordan urged to cancel Israel gas deal after supply halted amid Iran war
The suspension of Israeli gas supplies to Jordan, triggered by recent attacks on Iran, has reignited calls in Amman to cancel the gas agreement with Israel. The production halt - resulting from disruptions at the Leviathan gas field - is being cited by the Jordanian National Campaign to Overturn the Gas Agreement with the Zionist Entity, known by its slogan "The Enemy's Gas is Occupation", as grounds to terminate the deal. The campaign, a coalition of public figures, political parties and professional associations opposed to normalisation with Israel, views the current situation as a legal and political opportunity to annul the agreement under the force majeure clause. This clause permits cancellation without financial penalties if unforeseen events prevent the fulfilment of contractual obligations. Under the terms of the Israel-Jordan gas deal, force majeure refers to circumstances beyond the control of either party - such as natural disasters, armed conflict or political unrest - that render the implementation of the agreement unfeasible, they say. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters "What is happening now clearly constitutes a case of the other party failing to meet its contractual obligations," the campaign told Middle East Eye. "This opens the door to cancelling the agreement without legal or financial consequences. In fact, doing so is a duty dictated by national sovereignty and the safety of our citizens." The group called on the Jordanian government to act swiftly and begin developing sovereign domestic energy resources instead of relying on Israeli gas. 'Triple crime' The gas agreement, signed in 2016 and implemented in 2019, stipulates the import of natural gas extracted from the Leviathan field, located in the Mediterranean Sea off the coast of Haifa. Valued at approximately $10bn over 15 years, the deal entails Jordan receiving around 300 million cubic metres of gas per year, in return for long-term payments made to Israel. Critics argue that importing gas from Israel is unacceptable for several reasons, foremost among them opposition to normalisation with the Israeli state. According to the campaign, making Jordan dependent on Israeli gas constitutes a "triple crime". 'Black day': Hundreds rally in Jordan over 'treasonous' gas deal with Israel Read More » First, they argue, the deal exposes national sovereignty to political blackmail. Second, it channels $10bn of public money into the Israeli economy. Third, it deprives Jordan of the opportunity to invest those funds in sustainable, home-grown energy alternatives. Saleh Al-Armouti, Jordanian MP and head of the Islamic Action Front parliamentary bloc, echoed these concerns. He told MEE that the interruption of gas supplies provides Jordan with solid legal grounds to cancel the agreement or pursue compensation worth billions of dollars. "It is the legal right of the Jordanian state to file a lawsuit demanding compensation for the damages caused by the supply cut-off, based on the terms of the agreement," Al-Armouti said. He added that Jordan has viable alternatives to Israeli gas. "We already have infrastructure like the floating terminal in Aqaba, which costs millions annually without being fully utilised, as well as domestic sources such as the Risha gas field and the Attarat oil shale project," he added. Emergency plan In response to the cut-off in supply, Jordanian authorities have activated an emergency plan, which includes the temporary suspension of gas supplies to certain factories connected to the national grid. Jordan's national electricity company sought to reassure the public, stating that the country's fuel reserves for power generation are sufficient to last at least 20 days, even with the halt in gas supply from Leviathan. Government spokesperson and Minister of Government Communication, Mohammad Al-Momani, said authorities responded by switching to heavy fuel oil as an alternative, "as part of the emergency strategy developed by the Ministry of Energy". 'There are no strategic, long-term solutions in place' - Musa Al-Saket, economic expert Minister of Energy and Mineral Resources, Saleh Al-Kharabsheh, echoed these remarks, saying that despite the regional escalation, "the electrical system in Jordan remains stable and secure". Speaking on Thursday, Al-Kharabsheh announced that the government had activated alternative supply routes, including the import of 100 million cubic feet of gas per day from Egypt, to compensate for the shortfall. He added that Jordan is incurring additional costs to bolster its stockpile of petroleum derivatives, but emphasised that power stations are fully capable of switching to alternative fuels without compromising grid efficiency. On Friday, an Israeli energy ministry spokesperson said limited gas exports to Egypt and Jordan had resumed, using "surplus" supplies not required for domestic consumption. However, large-scale shipments remain unlikely in the near future. Lack of long-term solution Economic expert and member of the Amman Chamber of Industry, the engineer Musa Al-Saket, warned of the consequences of a continued suspension in natural gas imports, cautioning that a prolonged disruption could severely affect Jordan's industrial sector - particularly by increasing production costs. "The government and the National Electric Power Company (NEPCO) have outlined short-term alternatives lasting 20 to 30 days, but there are no strategic, long-term solutions in place," Al-Saket told MEE. "Most industries lack independent emergency plans, as they depend heavily on public-private partnerships within the energy sector." Al-Saket called for broader approval for the installation of renewable energy systems and urged increased investment in domestic energy sources, including the Risha gas field, oil shale projects and solar energy. According to data from the Ministry of Energy, Jordan in 2023 relied on imported natural gas for approximately 61.1 percent of its electricity generation, compared to 26.28 percent from renewable sources (solar and wind) and 12.62 percent from heavy fuel oil. The country's power stations consume around 1.5 billion cubic feet of gas per day, while installed renewable capacity stands at roughly 2,681 megawatts - meaning any sustained disruption in gas supply could pose a threat to the stability of the power grid. Jordan is contending with mounting economic challenges amid ongoing regional instability, driven by Israel's wars on Gaza, Lebanon and now Iran. The repercussions extend far beyond energy. Tourism - a cornerstone of the Jordanian economy - has been severely impacted, with rising tensions deterring international visitors. Jordan's geographical location - lying along the flight paths of Iranian missiles and Israeli fighter jets - has heightened its exposure to regional security threats and prompted costly defensive measures to safeguard its airspace and sovereignty.
Arabian Post
7 hours ago
- Arabian Post
China's Iran Oil Bet Hits Strategic Snag
China is confronting significant disruption to its Iranian crude oil supply, risking both its energy security and geopolitical ambitions in the Middle East. With over 90 per cent of Iran's oil exports directed to China via Kpler, the contraction of that flow places Beijing's $400 billion 2021 cooperation deal in jeopardy. Major Chinese independent refiners, the so‑called 'teapots' in Shandong province, are enduring mounting losses as deepening discounts on Iranian oil clash with soaring global prices. Discounts have widened to between $3.30 and $3.50 a barrel against ICE Brent for July cargoes – up from approximately $2.50 in June – contributing to refinery utilisation dropping to around 51 per cent, down from 64 per cent a year ago. Despite Israel's airstrikes targeting Iranian energy infrastructure and concerns over potential U.S. sanctions, Iran has maintained its exports through a shadow tanker fleet and strategic logistics adjustments. Kpler reports that crude loadings have reached a five‑week high of about 2.2 million barrels per day, assisted by the use of a less exposed jetty on Kharg Island and pre‑positioning of floating stocks nearer to China – including approximately 8 million barrels stationed offshore China. ADVERTISEMENT In 2024, Iranian shipments to China peaked at 1.6 million barrels per day, but that volume had already declined to roughly 740,000 bpd by April 2025, as broader Middle East instability and tightening sanctions exerted pressure. Rival supplies from OPEC+ producers like Saudi Arabia and the UAE may partially compensate, yet analysts emphasise that prolonged disruption would still erode Beijing's strategic leverage and diplomatic role in the region. For China, this dependence on Iranian crude is part of a broader ambition to deepen its influence across the Middle East as a counterweight to the West. The initial rationale behind the 25‑year deal encompassed energy security, infrastructure projects, trade expansion, and regional diplomacy. But the conflict's escalation threatens those objectives, undermining China's established pipeline for cheap oil and complicating its efforts to mediate regional tensions. Economists note the urgency for Beijing to accelerate its shift toward renewable energy and domestic self-reliance. China had already reached a milestone with renewables comprising 56 per cent of its electricity capacity in 2024. The current moment has intensified calls to reduce external vulnerabilities and accelerate electrification. At present, the Chinese government has refrained from military engagement, calling for de-escalation and abstaining from direct intervention in support of Iran. Instead, it is pursuing regional diplomacy while guarding its considerable investments. A Chinese foreign ministry spokesperson emphasised the need to 'prevent the region from spiralling into greater turmoil', particularly to secure stable energy imports. However, should the conflict deepen, or if key Iranian oil infrastructure suffers irreparable damage, China's reliance on opaque supply routes and shadow trading may no longer suffice. Its medium‑term strategy of presenting itself as a credible peace broker in the Middle East faces growing strain amid diverging interests between Iran and Gulf states. China appears poised to rely more heavily on Gulf crude, yet that reliance comes with its own geopolitical calculations. Riyadh and Abu Dhabi together hold significant spare capacity – over 4 million barrels per day – which may cushion global shocks but do little to salvage China's ambition to sustain influence via energy partnerships. The unfolding developments in the Israel–Iran arena have exposed strategic fissures in a partnership that once appeared unshakeable. Even as Iran adapts tactically to maintain its export pipeline to China, Beijing must confront the reality that maintaining influence in the region demands resilience beyond discounted barrels and shadow fleets.
Arabian Post
10 hours ago
- Arabian Post
Gulf Airspace Shockwaves Prompt More Re-routings
Arabian Post Staff -Dubai Major U.S. and European carriers have halted flights to key Gulf destinations amid escalating hostilities between Israel and Iran, while international regulators warn of heightened risk as far-flung air routes face rerouting challenges. American Airlines has paused its Philadelphia–Doha service until at least 22 June, citing growing security concerns, with a spokesperson affirming the decision would be reviewed 'as needed'. United Airlines has similarly suspended Newark–Dubai flights, stating the route would resume once safety conditions permit. ADVERTISEMENT European airlines, including Air France‑KLM, Lufthansa and Wizz Air, are enduring significant disruptions due to enforced airspace closures over Israel, Iraq and Jordan. These closures funnel more than 150 carriers through narrow corridors over Turkey, Saudi Arabia and Egypt, inflating flight durations and fuel consumption amid existing pressures from prior restrictions over Russian airspace. The European Union Aviation Safety Agency and the U.S. Federal Aviation Administration have flagged elevated risks across the broader region. Coverage spans Iran, Israel, Iraq, Syria and adjacent zones, citing threats from advanced air‑defence systems, missile misidentification and accidental interceptions. Global traffic analysis reveals more than 3,000 flight cancellations daily in the Middle East since mid‑June. Airlines are rerouting flights to Europe and Asia via longer paths over Central Asia and the Mediterranean, adding hours to journeys and intensifying operational strain on air traffic control. Air India, coping with the fallout of a Boeing 787‑8 crash in India on 12 June which killed 241 passengers, has cut its international schedule by 15 per cent. The airline cited Middle East airspace closures among the factors prompting cancellation of 83 flights, with the reduced timetable expected until mid‑July. The conflict's origins trace back to Israeli airstrikes on Iranian nuclear facilities, including the Arak heavy water reactor, with Iranian missile attacks wounding more than 240 people in southern Israel and critical infrastructure hit in Tel Aviv. Iran followed with a barrage of over 400 ballistic missiles and drones, affecting hospitals and civilian areas. Western intelligence indicates U.S. President Donald Trump is weighing participation in a military campaign against Iran, with a decision expected within two weeks. The prospect of U.S. involvement has intensified caution among airlines and aviation regulators worldwide. On the financial front, Brent crude has surged approximately 8 per cent to around $70.8 a barrel, intensifying the cost implications of rerouted flights and further pressuring carriers already grappling with fuel expenditures. European airline stocks have reacted sharply, with major flags posting declines as markets factor in ongoing disruptions. Passengers are eligible for full refunds if itineraries include flights through restricted airspace. Those traversing high-risk, open but uncertain zones may face varied refund policies depending on airline terms. Travel demand is also shifting, with travellers opting out of flights through Dubai or Doha to avoid uncertainty—further dampening booking volumes at major Gulf hubs. Industry experts caution that any broadening of the conflict—especially with U.S. military action—could force additional closures, strain remaining corridors and degrade regional air connectivity. Past incidents have shown that misidentification of civilian aircraft and missile overreach are genuine risks. Amid this volatility, airlines are racing to recalibrate operations, adjust crew rotations and manage passenger impacts.
