US strikes on Iran nuclear sites could hit weakening American economy

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.

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Scottish Sun

25 minutes ago

• Scottish Sun

Rangers EGM vote revealed as Ibrox club plan £20million investment, new share issue and company switch

Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) IT'S officially all systems to go for the new American-led era at Rangers. That's after the Ibrox club's new US owners' immediate plans were rubber-stamped at an EGM. Sign up for the Rangers newsletter Sign up 3 New Rangers chairman Andrew Cavenagh Credit: Alamy 3 Leeds chairman Paraag Marathe is now also in a senior post at Ibrox Credit: Alamy 3 05.06.2025 Rangers FC press conference for new head coach Russell Martin: Russell Martin Credit: Willie Vass It was just a few weeks ago when the American consortium comprised of health insurance tycoon Andrew Cavenagh and 49ers Enterprises sealed the deal to take over Rangers. After months of talks, the Gers announced at the end of May that it had all gone through, heralding the start of a new era for the Light Blues. Cavenagh was immediately installed as the club's new chairman with 49ers chief Paraag Marathe - who's also the Leeds United chairman - taking up the position of vice-chairman. The big changes continued with Kevin Thelwell quickly beginning work as sporting director before Russell Martin arrived as head coach the week after the takeover was officially done. Martin is working with the Gers squad for the first time today with the players back for pre-season training. With plenty of change in and around the club, fans are now keen to see new players come in the door sooner rather than later. And now, a big step forward to that becoming a reality has been confirmed. For the first time since taking the helm, Cavenagh and Marathe are in Scotland. They've headed for Glasgow where Rangers have been holding an extraordinary general meeting (EGM) this morning at the Double Tree by Hilton hotel in the city centre. The meeting saw several key resolutions voted on by the club's shareholders. Rangers captain James Tavernier spotted training with ex-team-mate and old Premiership rival Ryan Porteous who branded him 'bad loser' The biggest of those was to ratify the proposed £20million injection into the club. Immediately after the takeover was sealed, the new owners stated their intention to invest the £20m immediately and launch a new share issue - subject to shareholder approval. Top of the agenda, the resolution has been passed, alongside a second resolution that was directly linked to it. It means new boss Martin will now have the funds available to add to his squad. Time is of the essence in terms of squad strengthening with the Champions League qualifiers getting underway in a month's time. Rangers will take on Panathiniakos in the second qualifying round. The rubber-stamping of the investment wasn't the only thing on the agenda, however. One of the other resolutions voted on was to ratify Rangers' switch from PLC (public limited company) to a private limited company (LTD). Since 2012, the club have been operating as 'The Rangers International Football Club PLC.' Going forward, it will now be known as 'Rangers International Football Club Limited.' The shift to a limited company sees a change in the business structure and essentially gives the new owners an additional layer of control. It also means that any new shares cannot be offered publicly going forward. All resolutons passed with over 98% approval. Keep up to date with ALL the latest news and transfers at the Scottish Sun football page

Daily Record

27 minutes ago

• Daily Record

What is the Strait of Hormuz and why does it matter to global trade?

The UK could be hit hard if Iran closes the Strait of Hormuz in response to American strikes on its nuclear sites Fears of a widening conflict in the Middle East have deepened in recent days after the US bombed Iran. President Donald Trump made the unprecedented decision to bomb three Iranian nuclear sites over the weekend. The UK was not involved in the air strikes but was informed beforehand. John Swinney has called for the conflict to end, while Keir Starmer said Iran's nuclear programme is a "grave threat" which US military action would "alleviate". ‌ The world is now bracing for Iran's response to the US joining Israel in the biggest western military action against the Islamic Republic since its 1979 revolution. ‌ One way Iran could hit back, according to analysts, is to close off the strait of Hormuz, a vital trade route, through which over a fifth of the world's oil supply, 20m barrels, and much of its liquified gas, passes each day. Iran's parliament approved a measure to close the strait. Iran has threatened to close the strait in the past, which would restrict trade and impact global oil prices, but has never followed through. This time may be different, though. What is the strait of Hormuz? The strait of Hormuz lies between Oman and Iran and links the Gulf to the north with the Gulf of Oman to the south and the Arabian Sea beyond. It is 33km wide at its narrowest point, with the shipping lane just 3km wide. The strait is one of the world's most important oil chokepoints and is crucial to the US and beyond, as the strength of the global economy is heavily dependent on the flow of oil. Why is it so important? ‌ About one-fifth of the world's total oil consumption passes through the strait. Between the start of 2022 and last month, approximately 17.8 million to 20.8m barrels of crude, condensate, and fuels flowed through the strait daily, according to data from analytics firm Vortexa. Members of the Organization of the Petroleum Exporting Countries (OPEC) – Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq – export most of their crude via the strait, mainly to Asia. The US Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area. ‌ What happens if it closes? Closing the strait would trigger a global oil crisis, skyrocket inflation rates and potentially plunge the economy into a downturn. On Sunday, specialists cautioned that such a move to shut the strait might also elicit "a significant military response" from both the US and its allies. Ami Daniel, CEO of maritime data company Windward, noted that even the mere "perception" of an Iranian assault on shipping could reduce maritime traffic to a mere trickle. ‌ Countless drivers could be hit with soaring fuel costs at the filling stations. The UK, which relies on imports for roughly half its oil supply, stands to be particularly exposed. Iran has been warned that shutting down the strait would be tantamount to "economic suicide", as reported by The Telegraph. ‌ US Secretary of State Marco Rubio has called on Iran's allies, including China, to exert pressure on Tehran to keep the Strait of Hormuz open, stating that any closure would be a "terrible mistake". Iranian oil also uses the same gateway, and shutting Hormuz risks bringing Gulf Arab states, who have been highly critical of the Israeli attack, into the war to safeguard their own interests, according to The Guardian. China would be particularly affected. The world's second-largest economy buys almost 90 per cent of Iran's oil exports, which are subject to international sanctions. ‌ What is Iran saying about the strait? Iranian lawmakers have voted to obstruct vital shipping routes through this key waterway after Trump decided to engage in the conflict between Israel and Iran. Iran's Press TV reported at the weekend that the Iranian parliament approved a measure to close the strait of Hormuz However, the vote by the Iranian parliament is not definitive, and state television has emphasised that the ultimate decision lies with Iran's top security officials. ‌ On Sunday Iran's foreign minister, Seyed Abbas Araghchi, said that Trump's decision to bomb Iran " will have everlasting consequences". Israel has made a "grave mistake" and "must be punished." He did not, however, make any specific reference to the strait of Hormuz. Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'.

The National

28 minutes ago

• The National

What Ibrox chairman Andrew Cavenagh said as he addressed Rangers fans

On the last occasion that power was seized at Ibrox back in 2015 there had been months of protests in the stands, ticket boycotts and online agitation and at one stage a baying mob even tried to storm the front door of the stadium. On the day that John Gilligan, Dave King and Paul Murray were finally elected to the board 10 years ago – a move which successfully ousted a reviled hierarchy which comprised Mike Ashley associates Derek Llambias and Barry Leach – at an Extraordinary General Meeting there were jubilant scenes down Govan way. One Bear even turned up wearing a rat mask and holding a sign which read, 'Glasgow Airport is five miles. Rataway. Taxi for Ashley, Llambias, Leach.' There were no such unruly scenes, no animosity, at an EGM in the Doubletree by Hilton hotel in Glasgow city centre this morning as an important staging post in the successful £75m takeover by a consortium which comprises American health insurance billionaire Andrew Cavenagh and 49ers Enterprises was reached. The duo's proposed £20m investment into Rangers was dependent on one ordinary resolution and three special resolutions being accepted by shareholders. It was all a formality. Still, with new chairman Cavenagh and vice-chairman Paraag Marathe in attendance and making themselves available to shareholders to answer questions there was a bumper turnout. The decision by the likes of John Bennett, Dave King, Douglas Park, and Barry Scott to sell part or all of their stakes to the Cavenagh-49ers Enterprises alliance met, after another wretched, trophyless season with the complete approval of the vast majority of supporters. Hopes are high things will be different on and off the park moving forward. The gathering proved to be a bit of a love-in. Chief executive Patrick Stewart, former chairman Fraser Thornton, vice-chairman Marathe, and chairman Cavenagh received a warm ovation from several hundred supporters when they took to the stage. Cavenagh stood and started with a quip about why he wasn't sitting as he spoke. "I figured it wasn't the right way to start this relationship with a low block," he said. He added, "Last October I got a phone call and I will never forget it. It changed my life. Would you and your group have an interest in investing in Rangers. I said, 'Absolutely'. "The breadth and depth of the passion is the number one thing I love about this club. No 2 is Ibrox. I think of it as our castle. It gives us a competitive advantage. It is a magical place to play. "Let me be clear about our ambitions. Our ambition is to win leagues and cups and do it in a financially self-sustaining manner. It is our goal to make sure that the club is in that position over the next 10 years. It is incredibly important that we continue to attract the best talent." Marathe said, "Our philosophy is pretty simple and it is - is about making data-based decisions. It has worked for us in different organisations and I believe it will work for us here." Rangers fan ad former MP Sir Brian Donohoe was , "I welcome the input of the 49ers consortium. I am a long-term shareholder of the club. I would ask that you would give the 49 per cent some respect. I still can't see where the 49 per cent of the shareholders are being represented in the Articles of Association." Cavenagh said, "There are so many supporters shareholders in the club and we think that is fantastic. We really value that. There are a couple of different ways the minority are protected. "In UK law there are certain things that can't happen unless 75 per cent agree. George Taylor and John Halstead will make sure the minority shareholders are represented. Our focus is on making sure the club has our resources." Resolution One dealt with the allotment of shares and effectively enables Cavanagh and the 49ers Enterprises to invest fresh capital in return for shares. Resolution Three and Resolution Four, meanwhile, concerned the move to a Limited Company and the new Articles of Association. Cavenagh confirmed that it is the new Rangers hierarchy's intention to continue to hold an AGM when they become a PLC and to continue to consult with the Rangers Fan Advisory Board. A fan asked if stadium expansion was something that would be considered. Marathe said, 'Right now our first priority is improving us on the pitch, that is the urgent priority. But absolutely. We have a tremendous supporter base. We have already been looking at different things from an expansion perspective." One fan then asked, "What players are we going to get? Are we going to get someone who can pass the ball to our centre forward." Marathe said, '"It is best for all of us that we keep our efforts private. Our goal is to make the club as successful as possible. That doesn't necessarily mean throwing money at it, it means being smarter, being more wise and building a plan for sustained success. We hope there are a lot of trophies and cups for us within our lifetime" Cavenagh stated, "This is not and will never be about me or about Paraag. Football decisions will be made by football people." One fan asked if the new board realised that Rangers would be under pressure to perform from their first game of the season. Marathe said, "Every manger is under pressure to win. We all feel it, Russell [manager Martin] feels it. There is no such thing as a honeymoon period in professional sports." Asked how much money Martin would have to spend on players this summer, Cavenagh said, "Echoing what Paraag said earlier, we will be as transparent as we can be. In other areas, we are going to be really opaque and this is one of those areas." One fan asked how Cavenagh and 49ers Enterprises planned to monetise their investment. Cavenagh said, "I will give you a really blunt answer - we do not have an exit plan, we have a growth plan. We will figure out the exit plan once we have achieved the growth plan." One fan accused Rangers of being weak in their dealings with the SFA and referenced the fine the club were hit with for John Brown's comments on RTV about a disallowed goal at Easter Road last season. "You make a good point," said chief executive Stewart. "We have made two pretty forceful statements. We do believe what the SFA did is inconsistent. But we do need to work with the SFA. We will fight the fight when we think there is a clear case. We will stand our ground when it is justified." It was revealed that Marathe and Cavenagh will meet with the SPFL tomorrow and the latter said, "Working together with the other clubs is important."