Oil Soars 7% as Israel-Iran Clash Sparks Fears of Supply Disruption and Wider Regional Conflict

Commodity

Middle East Situation

Summary:

Oil prices surged over 7% to multi-month highs after Israel launched strikes on Iran, intensifying geopolitical risk and raising concerns of supply chain disruptions in the Middle East, particularly around the vital Strait of Hormuz....

Middle East Conflict Sends Oil Prices Skyrocketing

Global oil markets erupted on Friday, with Brent crude rising $5.29 to $74.65 per barrel and WTI crude climbing $5.38 to $73.42 — both marking their highest levels in months. The immediate catalyst was Israel’s military action targeting Iran’s nuclear and missile infrastructure, an escalation that investors fear could spiral into a broader regional conflict.

Explosions in Tehran were confirmed by local media, and Iranian officials declared a state of emergency, with retaliatory action expected. Israel’s Prime Minister Benjamin Netanyahu said the strike targeted critical military and nuclear assets, increasing fears of a sustained confrontation between two of the region’s most influential powers.

Supply Risk Premium Back in Play

Although actual oil production has not yet been disrupted, analysts warn the psychological impact and the potential for escalation could drive further price increases. According to Saul Kavonic of MST Marquee, if the conflict leads to Iranian retaliation involving oil facilities or maritime routes — particularly the Strait of Hormuz — up to 20 million barrels per day could be at risk.

The Strait of Hormuz is the world’s most strategic chokepoint for crude oil, with roughly one-fifth of global oil consumption passing through it. Any move by Iran to restrict this route, whether through military or political means, could send prices soaring and reignite global inflationary pressures.

Markets React Sharply to Geopolitical Shock

Beyond oil, financial markets responded with broad risk-off behavior. U.S. equity futures fell sharply in early Asian trade, while demand surged for safe-haven assets like gold and the Swiss franc. The gold price, already elevated due to Fed rate cut expectations, extended its gains, climbing toward record highs.

Phillip Nova analyst Priyanka Sachdeva emphasized that while the U.S. has distanced itself from the attack, its military assets in the region remain vulnerable if Iran decides to retaliate broadly. The possibility of “contagion” — extending conflict to other oil producers such as Iraq, Saudi Arabia, or the UAE — further adds to the risk environment.

Trump Administration’s Calculated Distance

Despite calls for restraint, President Trump has maintained a hands-off stance, labeling Israel’s actions as unilateral. U.S. Secretary of State Marco Rubio reiterated Washington's non-involvement, while urging Iran not to provoke or endanger American personnel in the region. However, many analysts suggest that even limited U.S. involvement could dramatically escalate tensions and increase the likelihood of supply chain disruptions.

Friday's oil surge underscores the fragility of global energy markets when geopolitical flashpoints flare in key production zones. With limited spare capacity globally and supply-demand balances already tight, any protracted escalation in the Middle East could have lasting consequences. As traders brace for potential weekend developments and retaliatory threats, oil’s volatility is likely to remain elevated, with investors keeping a close watch on the Strait of Hormuz and the potential for spillover into global inflation and monetary policy recalibrations.

Risk Warnings and Disclaimers

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Gerik

Commodity

Middle East Situation

Gold's Ascent Amid Rising Global Uncertainty

Gold extended its upward momentum in early Asian trading Friday, climbing 1.1% to $3,424.79 an ounce, spurred by the dramatic escalation in Middle East tensions. Israel’s targeted airstrikes on Iranian nuclear facilities sparked a flight to safety across markets, with investors bracing for potential retaliation and broader regional destabilization. Explosions reported in Tehran and statements from Israeli defense officials further heightened the sense of urgency.

Strategists like Charu Chanana of Saxo Markets emphasized that gold is now a hedge not only against direct military conflict but also against its broader economic consequences — including elevated volatility, inflationary pressures, and possible disruptions to oil markets. These risks, layered on top of fragile global sentiment and ongoing trade tensions, have made gold a compelling store of value.

The Federal Reserve Factor

Recent economic data out of the U.S. added fuel to gold's bullish momentum. Weakness in inflation readings — particularly subdued producer price data — and a sharp rise in continuing jobless claims suggest cooling economic activity, increasing the probability of Fed rate cuts later in 2025. Lower interest rates diminish the opportunity cost of holding non-yielding assets like gold, making bullion more attractive in diversified portfolios.

This macro backdrop has already contributed to a roughly 30% rise in gold prices year-to-date. The Fed’s dovish tilt, combined with ongoing uncertainty surrounding President Trump’s erratic trade agenda, particularly toward China and the EU, has only reinforced the metal’s upward trajectory.

Institutional Support and Global Demand Surge

Beyond speculative flows, central banks and sovereign institutions have played a notable role in supporting gold prices. Sustained accumulation — likely aimed at diversifying away from U.S. dollar reserves amid a weakening greenback — is a structural tailwind. Spot demand from Asian markets, notably China and India, remains strong, particularly with inflation fears lurking behind shifting supply chain dynamics and potential energy shocks.

Gold’s proximity to its record high of $3,500.10 reached in April suggests traders are not just reacting to headline events but positioning for a long-term regime shift — one where geopolitical instability, fiscal profligacy, and monetary easing dominate the global economic landscape.

Gold’s latest rally encapsulates a confluence of short-term shocks and long-term structural shifts. From the flames of a possible Iran-Israel conflict to cooling U.S. macro indicators and the declining credibility of the U.S. dollar, the bullion market reflects a growing investor appetite for certainty in uncertain times. Unless diplomacy in the Middle East and clarity from the Fed emerge quickly, gold is likely to remain elevated — and could even test new highs if tensions escalate further.

Source: Reuters

Risk Warnings and Disclaimers

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Hannah Ellis

Economic data points from the United States often send ripples across global markets, and this week is no different. The latest report on the US PPI, or Producer Price Index, just dropped, and it’s stirring up some discussion about the state of inflation and what it could mean for assets like cryptocurrencies.

What Did the Latest US PPI Report Show?

The U.S. Department of Labor recently released the figures for the Producer Price Index for May. Here’s a quick breakdown of the key numbers:

● Month-over-Month (May vs. April): PPI rose by 0.1%. This was slightly below the market expectation of a 0.2% increase.

● Year-over-Year (May 2024 vs. May 2023): PPI increased by 2.6%. This figure was in line with forecasts and represented a slight uptick from the 2.5% recorded in April.

This print, particularly the softer month-over-month figure, provides a slightly different perspective on inflationary pressures compared to some recent data releases. It suggests that the prices producers are receiving for their goods and services aren’t accelerating as quickly as some anticipated.

Understanding the Producer Price Index: Why Does it Matter?

So, what exactly is the Producer Price Index? Think of it as a measure of inflation from the perspective of the sellers or producers in the economy. It tracks the average changes in selling prices received by domestic producers for their output.

Why is this important? Because changes in producer prices often serve as an early indicator of potential changes in consumer prices. If producers are paying more for raw materials or receiving higher prices for their goods, those costs can eventually be passed on to consumers, showing up later in the Consumer Price Index (CPI). The PPI is often seen as a leading or coincident indicator for the CPI, though the relationship isn’t always perfectly direct or immediate.

Tracking the PPI helps economists and policymakers gauge inflationary trends earlier in the supply chain.

How Does This Inflation Data Influence the Federal Reserve?

The Federal Reserve, the central bank of the United States, has a dual mandate: to maximize employment and maintain stable prices (control inflation). Economic data like the PPI is crucial for the Fed’s decision-making process regarding monetary policy, specifically interest rates.

When inflation data comes in lower than expected, it can provide the Fed with more flexibility. It suggests that the economy might be cooling down, and the urgency to keep interest rates high to combat inflation could lessen. Conversely, hotter-than-expected inflation data puts pressure on the Fed to maintain or even increase rates.

While the Fed pays closer attention to the Personal Consumption Expenditures (PCE) price index as its preferred inflation gauge, the PPI and CPI are also significant inputs into their assessment of the overall inflationary environment. A series of softer inflation prints across different measures could pave the way for potential interest rate cuts in the future.

The May PPI report, showing a slightly weaker month-over-month increase than anticipated, could be interpreted by markets as a sign that inflationary pressures might be easing. This narrative, if sustained by future data, could support the argument for the Federal Reserve potentially cutting interest rates sooner rather than later. While one data point isn’t a trend, it adds to the overall picture the market is building.

Looking Ahead: What’s Next for Economic Indicators?

While the May PPI data provides a piece of the puzzle, markets are always looking ahead to the next major releases. The Consumer Price Index (CPI) is often considered more impactful for direct market reaction, and the May CPI data is also highly anticipated. The CPI report will give us insight into inflation from the consumer’s perspective, which is a critical component the Fed evaluates.

Beyond inflation data, market participants will also be closely watching employment figures, retail sales, and manufacturing data to get a comprehensive view of the U.S. economy’s health. The collective picture painted by these economic indicators will heavily influence market sentiment and expectations regarding the Federal Reserve’s future actions.

In Conclusion

The U.S. May PPI report came in slightly below market expectations on a month-over-month basis, while the year-over-year figure remained stable and in line with forecasts. This data point suggests that inflationary pressures at the producer level might be moderating, which is a piece of potentially good news for those hoping for future interest rate cuts from the Federal Reserve. While not a definitive game-changer on its own, this Inflation Data contributes to the ongoing narrative that could influence the Fed’s path and, consequently, the performance of the Crypto Market and other risk assets. As always, staying informed about key economic releases is vital for understanding the broader market context.

Source: CryptoSlate

Risk Warnings and Disclaimers

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Fiona Harper

U.S. President Donald Trump said on Thursday an Israeli strike on Iran "could very well happen," and a senior Israeli official told the Wall Street Journal it could occur as soon as Sunday unless Iran agrees to halt production of material for an atomic bomb.

U.S. intelligence has indicated that Israel has been making preparations for a strike against Iran's nuclear facilities, and U.S. officials have said on condition of anonymity that Israel could attack in the coming days.

The Wall Street Journal report was the first suggestion of a potential date for an Israeli strike on its longtime foe Iran as Israel tries to block Tehran from developing a nuclear weapon.

Trump on Thursday reiterated his hopes for a peaceful end to the tensions, and there was counter-speculation that the threat of an Israeli attack was a tactic intended to pressure Iran into concessions on its nuclear program at the negotiating table.

"We remain committed to a Diplomatic Resolution to the Iran Nuclear Issue!" Trump wrote on his Truth Social platform.

"My entire Administration has been directed to negotiate with Iran. They could be a Great Country, but they first must completely give up hopes of obtaining a Nuclear Weapon," he added.

Tensions have been building as Trump's efforts to reach a nuclear deal with Iran appear to be deadlocked.

U.S. and Iranian officials were scheduled to hold a sixth round of talks on Tehran's escalating uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators.

Speculation about an Israeli attack has raised fears that such a move could spark a regional war and retaliatory strikes from Iran, which has vowed to destroy Israel.

Axios reported on Thursday that the White House has told Israel the U.S. will not be directly involved in any Israeli strike on Iranian nuclear facilities, quoting two U.S. sources and an Israeli source familiar with the discussions.

Analysts have said Israel is unlikely to act without U.S. support, citing past threats on Iran that fizzled out without Washington's backing.

The Wall Street Journal said the U.S. would not provide "offensive assistance" to Israel for an attack on Iran.

While the U.S. could still aid Israel with intelligence or logistics support as well as help defend Israel if Iran strikes back, it was unclear how the reported U.S. unwillingness to participate directly might influence Israeli decision making.

Axios said a solo Israeli operation would be more limited because its air force does not have bombers that can carry the bunker buster bombs needed to hit Iran's Fordow underground uranium enrichment facility.

IRAN IN BREACH, UN BODY SAYS

The U.N. nuclear watchdog's board of governors on Thursday declared Iran in breach of its non-proliferation obligations, and Tehran announced counter-measures. A senior Iranian official said a "friendly country" had warned it of a potential Israeli attack.

Security concerns have risen since Trump said on Wednesday that U.S. personnel were being moved out of the region because "it could be a dangerous place" and that Tehran would not be allowed to develop a nuclear weapon.

Israeli Prime Minister Benjamin Netanyahu raised the possibility of strikes in a phone conversation with Trump on Monday, the Journal reported, citing two U.S. officials.

"I don't want to say imminent, but it looks like it's something that could very well happen," Trump told reporters at a White House event earlier on Thursday, adding Iran could not be allowed to develop a nuclear weapon.

"I'd love to avoid the conflict," he said. "Iran's going to have to negotiate a little bit tougher, meaning they're going to have to give us something they're not willing to give us right now."

Security in the Middle East has already been destabilised by spillover effects of the Gaza war between Israel and Palestinian militant group Hamas.

Trump has threatened to bomb Iran if the nuclear talks do not yield a deal and said he has become less confident Tehran will agree to stop enriching uranium. The Islamic Republic wants a lifting of U.S. sanctions imposed on it since 2018.

Trump on Thursday also expressed frustration that oil prices had risen amid supply concerns arising from potential conflict in the Middle East.

With Washington offering little explanation for its security concerns, some foreign diplomats suggested that the evacuation of personnel and U.S. officials anonymously raising the spectre of an Israeli attack could be a ploy to ratchet up pressure on Tehran for concessions at the negotiating table.

A senior Iranian official told Reuters on Thursday the latest tensions were intended to "influence Tehran to change its position about its nuclear rights" during the Sunday talks.

Iranian President Masoud Pezeshkian said that even if the country's nuclear facilities were destroyed by bombs they would be rebuilt, state media reported on Thursday.

BREACH OF NON-PROLIFERATION OBLIGATIONS

The International Atomic Energy Agency's Board of Governors declared Iran in breach of its non-proliferation obligations for the first time in almost 20 years, raising the prospect of reporting it to the U.N. Security Council.

The step is the culmination of a series of stand-offs between the IAEA and Iran since Trump pulled the U.S. out of a nuclear deal between Tehran and major powers in 2018 during his first term, after which that accord unravelled.

An IAEA official said Iran had responded to the 35-nation board's declaration by informing the U.N. watchdog that it plans to open a third uranium enrichment plant.

Enrichment can be used to produce uranium for reactor fuel or, at higher levels of refinement, for atomic bombs. Iran says its nuclear energy programme is only for peaceful purposes.

Additional reporting by Yousef Saba and Dubai newsroom, Marc Jones in London, GV De Clercq in Rome, Jeff Mason, Jarrett Renshaw, Humeyra Pamuk, Gram Slattery and Idrees Ali in Washington, Alexander Cornwell in Jerusalem; writing by Timothy Heritage, Michael Georgy, Matt Spetalnick and Deepa Babington; editing by Mark Heinrich, Deepa Babington and Cynthia Osterman

Source: Reuters

Risk Warnings and Disclaimers

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Alice Winters

Key Points:

● Main event, leadership changes, market impact, financial shifts, or expert insights.

● Trump's critique drops Bitcoin prices.

● No immediate action on Powell's position.

Donald Trump publicly criticized Federal Reserve Chair Jerome Powell on June 12, 2025, calling him a “numbskull” over current interest rates in a public appearance.

Trump's remarks led to a decline in Bitcoin's price, highlighting the impact of political discourse on cryptocurrency volatility.

Impact of Trump's Criticism

Trump referred to Powell during a public interview, insisting a rate cut is crucial. His criticism centers around the economic implications of current policies, emphasizing the need for changes in monetary direction.

The immediate aftermath saw Bitcoin prices dip, underscoring the influence of U.S. political rhetoric on market sentiment. Other sectors did not show significant fluctuations.

"We're going to spend $600 billion a year because of one numbskull," Trump said, illustrating his frustration with current economic leadership.

Concerns about U.S. fiscal policies and their macroeconomic effects often ripple through financial markets. Cryptocurrency, particularly Bitcoin, is sensitive to such high-profile comments, affecting investor behavior.

Looking ahead, potential policy shifts or regulatory responses could reshape market dynamics. Historical trends show such events typically provoke a short-term market response, especially among digital assets, raising questions about longer-term implications.

Source: CryptoSlate

Risk Warnings and Disclaimers

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Hannah Ellis

Israel launched airstrikes on Iran, in a major escalation in the standoff over Tehran’s atomic program that risks sparking a new war in the Middle East.

Source: Yahoo Finance

Risk Warnings and Disclaimers

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Alice Winters

Futures and yields are tumbling, and gold and oil are surging following reports of successive explosions in Iran as a result of what Al Arabiya and Axios report are Israeli airstrikes.

Separately Axios reports that the Israeli Air Force conducted a strike in Iran, citing two unidentified people with knowledge of the operation. It was not immediately clear who Israel is targeting.

In kneejerk response, stock futures are tumbling...