- Since the US and Israel attacked Iran, the global situation has been destabilized.
- Oil prices have skyrocketed and are now riding Donald Trump‘s roller coaster ride, rising and falling based on his statements.
- Experts agree that prolonging military action will increase inflation worldwide, primarily due to rising energy prices.
This week, Iran formally rejected the US-drafted 15-point ceasefire agreement. This decision sent Brent crude oil prices above $108 per barrel and triggered a selloff in global stock markets.
Tehran Foreign Minister Abbas Araghchi called the plan «unilateral» and US claims of productive talks «fake news.» Iranian state media сообщили, that the country’s authorities categorically rejected this proposal, and officials statedthat Iran «will end the war when it wants to.»
The Trump administration conveyed a 15-point framework agreement to Tehran through Pakistani intermediaries around March 24. The plan included a 30-day ceasefire, sanctions relief, cooperation on civilian nuclear energy, restrictions on Iran’s ballistic missile program, enhanced IAEA monitoring, and guaranteed access for ships through the Strait of Hormuz.
In response, the following were put forward: five requirements: a complete cessation of US and Israeli strikes, effective mechanisms against the resumption of hostilities, war reparations, Iranian sovereignty over the Strait of Hormuz, and the complete lifting of sanctions.
While Brent crude fell about 11% from its peak of $112 after Trump’s unsubstantiated statements, Iran’s refusal reversed the trend. On Friday, March 27, Brent bargained around $104–106, exceeding the $108 mark during the day. The price of fuel oil, in turn, rose by more than 6%.
Brent crude oil price. Data from Tradingview
The Strait of Hormuz, through which approximately 20% of global seaborne oil and LNG trade passes, has been effectively closed to traffic since March 2, yet maritime shipping volumes have fallen by more than 95%. A protracted conflict would reduce global supply by 13 to 14 million barrels per day.
Meanwhile, the US stock market is already feeling the pressure. On Friday afternoon, the Dow Jones Industrial Average fell 603,26 points to 45,356. The S&P 500 Index fell 86,18 points to 6,390. The Nasdaq Composite Index lost 404,39 points to 21,003, and the NYSE Composite Index fell 132,38 points to 21,711.
Central banks in Europe, Asia, and America have already begun to combat rising inflation caused by rising energy prices. The scale of this crisis has been compared to the oil crises of the 1970s, whose negative consequences spilled over into many other industries.
Alternative pipeline routes through Saudi Arabia, the UAE, and Iraq could partially offset disruptions to shipping through the Strait of Hormuz, but analysts say a complete replacement for seaborne volumes is unlikely in the near future.
This is why markets remain sensitive to any escalation of the conflict. As long as Iran maintains its position, prices above $100 per barrel may persist in the medium term. This same circumstance will fuel volatility in the crypto market.
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