OPEC Increases Output To Stabilize Market

Economic

Political

Summary:

The global oil market is back in chaos after Israel launched military strikes against Iran on Friday. The move pushed crude oil prices up 8% to $74 a barrel in a matter of hours, shaking up inflation forecasts and triggering panic over future supply.

The strike now threatens two critical lifelines: Iran's own daily crude exports and the Strait of Hormuz, one of the most vital chokepoints for oil tankers in the world.

Iran had already been seeing drops in its oil shipments before the attack. In May, the country exported 1.7 million barrels a day, based on figures shared by Bernstein, a brokerage.

That's a small slice—less than 2% of total global oil consumption—but in today's energy market, even small cuts matter. With rising tensions, those exports are expected to dip further, and there's no timeline for how long this disruption could last.

OPEC increases output to stabilize the market

The Organization of the Petroleum Exporting Countries (OPEC), where Iran is a founding member, has already moved to raise production. By the end of June, the group plans to push out an additional 960,000 barrels per day, reversing past cuts.

Analysts tracking the cartel expect that to rise further to 2.2 million barrels daily, but that depends on how fast they act and how deep the damage to Iran's export system goes.

Even with that extra oil coming, the current supply balance is fragile. If Iran's barrels disappear faster than OPEC can fill the gap, prices could shoot higher. Before the attacks, oil was already hovering between $75 and $80 per barrel depending on the month. Now, traders are bracing for those numbers to go out the window.

But the much bigger risk lies offshore, not in Iran's pipelines. The Strait of Hormuz, a narrow sea corridor between Iran and Oman, carries nearly a fifth of all oil traded globally. It's also a major path for Qatar's liquefied natural gas exports. If Iran retaliates by disrupting shipping lanes or attacking vessels, the impact would go far beyond Iran's own oil.

JPMorgan analysts warned that if tankers can't pass through, oil could blow past $130 per barrel. If it hits $120, it could instantly add 1.7 percentage points to US inflation, which is already at 2.4% year-on-year through the end of May. That would hit consumers directly, especially in America, where falling gas prices have helped slow inflation.

Trump watches oil closely

Despite the risk, Iran has never actually blocked the Strait of Hormuz, though it has threatened to do so many times. The actual logistics of closing the channel would be difficult. But with President Donald Trump now back in the White House, oil prices have once again become a major focus for US foreign policy.

Israel is expected to avoid hitting Iran's oil infrastructure for now, likely out of concern over how Trump would react to another oil shock.

Economic growth expectations are already slipping. Higher oil prices could stall recovery plans and force central banks to hold off on any interest rate cuts. That would make borrowing more expensive and slow down job creation. The ripple effect is already being felt, and it's barely started.

A planned US-Iran nuclear negotiation scheduled for Sunday in Oman has already collapsed. Iranian state media confirmed they won't attend, setting the stage for more escalations. Maksad said that without Iran returning to talks, “Israel will have to take successive rounds of action to take out what's left of Iran's nuclear program.”

Just one day before the strikes, the IAEA Board of Governors, the U.N.'s nuclear watchdog, formally declared Iran in violation of its nuclear safeguards for the first time in nearly 20 years. That ruling was expected to raise tensions. Instead, it lit the fuse.

Iran's Supreme Leader, Ayatollah Ali Khamenei, posted a response to the Israeli strikes on X, threatening a violent reaction. “That [Zionist] regime should anticipate a severe punishment,” he wrote, adding that Iran's Armed Forces “won’t let them go unpunished.”

In a second post, Khamenei said, “Several commanders and scientists have been martyred” but promised that their replacements would continue operations without delay.

Source: CryptoSlate

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Thomas

Political

Israel's attack on Iran is the latest in a series of global conflicts that are ratcheting airlines' security concerns, while weighing on their operations and profitability.

An increasing number of conflict zones around the world means airlines are forced to take longer and costlier routes – impacting fuel, emissions and passengers.

For passengers, this means flight cancellations and delays or longer journeys as jets are diverted away from conflict areas. Airlines are grappling with more airspace closures, threats from missiles or drones and GPS jamming.

Israel's attack on Friday is part of a broader trend of escalating geopolitical tensions that are “directly impacting global aviation”, following the situations in Ukraine and the Red Sea, according to independent security, aviation, maritime and energy analyst Dean Mikkelsen.

“We’re witnessing a growing patchwork of restricted airspace and this is putting considerable pressure on airlines and passengers alike,” he told The National.

For travellers, the most immediate impact will be on fares as aviation disruption results in longer flight times due to rerouting. In this case, routes need to be adapted around Iranian, Syrian and at times even Iraqi airspace, Mr Mikkelsen said.

Fuel consumption is expected to rise significantly. Jet fuel already makes up around 30 per cent of an airline's operating costs and that burden only grows when 30 to 90 minutes of extra flight time is needed.

Mr Mikkelsen estimates that routes from Asia to Europe or the Gulf to North America could translate to a 7 per cent to 15 per cent increase in fares, particularly on long-haul itineraries, especially as the peak summer season approaches.

Other knock-on effects are those on crew hours, insurance premiums and scheduling complexity, all of which erode profitability, he noted. “Carriers already operating on tight post-pandemic margins will feel this sharply,” he added.

The Israel-Iran conflict throws the region's aviation industry into question, especially with the uncertainty about how long the hostility will last.

Airspaces should always remain neutral and accessible when it is safe to do so, according to the International Air Travel Association.

Closures, in addition to using them in retaliatory ways, “fragment global connectivity, disrupt operations and hurt passengers and economies”, the Geneva-based Iata said.

Conflict zones substantially add to the disruption risks: in 2024, geopolitical conflicts led to significant airspace restrictions, affecting a substantial portion of long-haul routes, according to Iata data.

For instance, the Russia-Ukraine conflict, now in its fourth year, forced the rerouting of about 1,100 daily flights, leading to longer flight times and increased operational challenges, it said.

Fuel and emissions have also surged. Detours around conflict zones can lead to an average fuel consumption increase of 13 per cent on affected routes, Iata added.

When British Airways had to suspend flights to Beijing because it needed to avoid Russian airspace, the flight time was almost three hours longer and fuel costs increased by a fifth.

In October 2024 alone, multiple flights encountered Iranian missiles aimed at Israel, leading to diversions and emergency manoeuvres, Iata said.

The effect that conflict zones have on airspaces is also reflected in the shift of activity to other areas. For instance, countries like Egypt, with many rerouted flights passing through its airspace, would result in increased overflight fees and greater regional air traffic.

“The Cairo Flight Information Region is becoming a crucial alternative corridor, alongside Jordan and Saudi Arabia,” Mr Mikkelsen said.

Airlines across the region have delayed and cancelled flights following Israel’s early morning attack on Iran.

Ben Gurion Airport in Tel Aviv has shut down until further notice, Iran has declared its airspace closed and Iraq has temporarily suspended civilian operations at all its airports.

In the UAE, Etihad Airways cancelled its services to and from Tel Aviv, as Israel placed its air defence systems on high alert in anticipation of possible retaliation.

Other major airlines, including Emirates, Lufthansa and Air India, rerouted services mid-flight on Friday. An Emirates flight from Manchester was diverted to Istanbul, while an Air India flight from New York to Delhi was diverted to Sharjah.

Source: THENATIONALNEWS

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Middle East Situation

Key takeaways:

Bitcoin rebounds from a 5.5% drop after the latest escalation in the Israel-Iran conflict, repeating a pattern seen in October 2024.

Analysts highlight a bullish fractal involving liquidity grabs, suggesting BTC could soon break toward new highs.

Macro tailwinds and whale accumulation support a potential rally to $150,000 or more in 2025.

Bitcoin is flashing signs of bullish rejection, shrugging off recent selling pressure sparked by the renewed conflict between Israel and Iran. This setup is strikingly similar to one that preceded an 80% rally in late 2024.

Bitcoin bulls defend 2024-era trendline

On Friday, BTC rebounded from a low near $102,800 after sliding 5.5% in response to Israel’s airstrikes on Iranian targets. The cryptocurrency recovered a portion of its losses afterward, reaching over $105,500. Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_1

Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_1

BTC/USD daily price chart. Source: TradingView

The bounce aligns with a successful retest of Bitcoin’s 50-day simple moving average (50-day SMA; the red wave), a technical level that has historically acted as reliable support.

This price structure closely mirrors Bitcoin’s performance in October 2024, when it fell 8.8% after Iran launched a missile barrage on Israel. Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_2

Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_2

BTC/USD daily price chart. Source: TradingView

That decline also found support at the 50-day SMA, with BTC bottoming just around $60,500. What followed was a sharp reversal: Bitcoin surged over 80% by December, topping around $108,365.

A study by Andre Dragosch, head of research at Bitwise’s ETP arm ETC Group, shows that while Bitcoin often sees a short-term price decline during periods of geopolitical tension or conflict, it consistently rebounds.

On average, BTC recovers within 50 days and, in most cases, surpasses its pre-event price levels, underscoring the asset’s resilience in the face of global uncertainty. Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_3

Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_3

Top 20 geopolitical risk events and Bitcoin performance. Source:ETC Group

The current pullback may prove to be another brief pause in Bitcoin’s broader uptrend, especially in the wake of recent positive updates.

That includes the rising odds of Federal Reserve interest rate cuts and easing US-China trade tensions.

Onchain data confirms renewed whale accumulation, suggesting that large investors buy into price weakness. Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_4

Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_4

Source: CryptoQuant

Bitcoin setting up for ‘liquidity grab’ price explosion

Market analyst Merlijn The Trader points to a separate fractal unfolding, one driven by “liquidity grabs” by traders.

His side-by-side chart comparison shows signs of BTC breaking above a descending trendline and “range high” resistance, just as it did ahead of its surge past $100,000 after the Israel-Iran conflict in late 2024. Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_5

Bitcoin Mirrors 80% Rally Setup That Preceded 2024 Israel-Iran Conflict_5

BTC/USD 2024 vs. 2025 price trends. Source: TradingView/Merlijn The Trader

“Same structure. Same trap. Same breakout,” the analyst wrote, adding:

“In 2024, $BTC exploded after the liquidity grab. In 2025, it’s setting up again.”

Many analysts see Bitcoin’s price rallying to record highs in 2025, with year-end predictions ranging from $150,000 to over $200,000.

One skeptical analysis, though, sees BTC’s uptrend having been exhausted near its current record high of $112,000.

Source: Cointelegraph

Risk Warnings and Disclaimers

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Daniel Carter

Political

Middle East Situation

Key Points:

● Geopolitical tensions may spike market volatility.

● Focus on seeking diplomatic resolution.

● Potential impacts on crypto markets insight.

The engagement between Trump and Netanyahu holds significance due to its potential impact on geopolitical stability, affecting global markets and cryptocurrencies. The ongoing negotiations indicate cautious optimism with a potential shift in market dynamics.

Trump and Netanyahu engaged in strategic talks, focusing on Iran, amid escalating military actions. Netanyahu plans further discussions with Putin and Starmer. Tensions rise as both leaders seek diplomatic solutions to avoid broader conflict.

Immediate effects could involve increased volatility in cryptocurrency markets, particularly affecting Bitcoin and Ethereum. Historically, geopolitical tensions propel these assets due to their perceived safe-haven status, with traders reacting swiftly to developments.

Potential financial and political implications include strain on U.S.-Iran relations, influencing international policy and economic conditions. Market responses may include liquidity adjustments and increased trading volumes as investors hedge against uncertainty.

Insights on potential outcomes suggest continued price fluctuation, particularly in BTC and ETH, as geopolitical risks persist. Historical trends reveal correlations between regional instability and increased crypto activity, underscoring the market's sensitivity to global events.

Trump stated, "Very well. Yeah, we discussed a lot of things, and it went very well. Very smooth. We'll see what happens. You know, we're trying to do something with a country we just spoke about, Iran…I hope that's the way it works out. But it might not work out that way."

Source: CryptoSlate

Risk Warnings and Disclaimers

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Adam

Economic

Political

Iran launched more than 100 drones toward Israeli territory Friday morning after Israel’s overnight missile strike on the country killed at least three of its senior military leaders.

“We can now confirm that the Chief of staff of the Iranian Armed Forces, Commander of the IRGC and the Commander of Iran’s Emergency Command were all eliminated in the Israeli strikes across Iran,” Israel Defense Forces spokesperson Effie Defrin said.

“Iran launched approximately 100 UAVs towards Israeli territory, which we are working to intercept.”

Rocket sirens sounded in northern Jordan as Jordan’s state media reported the country intercepted several Iranian drones in its airspace.

Israel’s attack on Iran, which it said was targeted at nuclear enrichment facilities, came just days before U.S. and Iranian officials were set to attend a sixth round of nuclear deal talks. It was the largest attack on the Islamic Republic since the Iran-Iraq war of the 1980s.

Iranian state news agency Tasnim on Friday afternoon local time reported a fresh wave of Israeli strikes on a military airport in the northwestern city of Tabriz. Around the same time, U.S. President Donald Trump made his first comments on the attacks in a post on Truth Social, urging Iran to reach a deal “before it’s too late.”

“I gave Iran the opportunity to make a deal. I told them, in the strongest terms, ‘Just do it.’ But no matter how hard they tried, and how close they got, they just couldn’t do it,” Trump wrote.

He added: “Now everyone is dead, and it’s only going to get worse but there is still time to stop this slaughter – before the next attacks, which are expected to be even more brutal. Iran must reach a deal. Just do it, before it’s too late. God bless you all!”

News of the strikes sent oil prices surging as much as 13% before paring gains, with global benchmark Brent crude surpassing $78 a barrel at one point.

Asian and European stocks fell, as investors rushed into safe havens amid fear of a wider war in a region that accounts for one-third of the world’s oil supply. Dow futures were down around 500 points at 6:35 a.m. ET.

Brent crude

was last trading around $75.38 per barrel at 6:35 a.m. ET, up 8.5%, with U.S. WTI trading at $74.11 per barrel, up about 9%.

In televised remarks Friday, Israeli Prime Minister Benjamin Netanyahu described the opening strikes on dozens of Iranian sites as “very successful,” saying “we struck the senior command, we struck senior scientists that advance development of nuclear weapons, we struck nuclear installations.”

He also made it clear that his country will continue to attack Iran “until the threat is removed,” and said that Israelis may have to spend “far longer periods in shelters than we were accustomed to until now.”

All eyes are now on the next moves by Iran and the United States, particularly whether the U.S. will get involved in this conflict. The U.S. State Department has stated it was not involved in Israel’s overnight strikes on Iran, with Secretary of State Marco Rubio calling the actions unilateral and urging Iran not to target U.S. interests or personnel in the region.

Tehran does not see it that way. Iran’s foreign ministry warned it would hold Washington responsible for the consequences of Israel’s actions.

President Trump is expected to attend a meeting of the National Security Council scheduled for 11 a.m. Eastern Time.

What happens next?

Friday’s strikes and the Iranian response are likely just the beginning in a rapid cycle of escalation, according to regional analysts.

“My sense is, from what we can tell in this early hour — and the assessment of the damage is going to have to go on for days — is that this is probably still the opening salvo,” Firas Maksad, managing director for the Middle East and North Africa practice at Eurasia Group, told CNBC.

A fresh round of U.S.-Iran nuclear deal negotiations were scheduled for Sunday in Oman. Iranian officials have been cited by state media saying they will not be attending.

“If Iran does not come back to the negotiating table, as the U.S. has already called on it to do ... then I think, and I fear, that Israel will have to take successive rounds of action to take out what’s left of Iran’s nuclear program,” Maksad said.

The strikes took place just one day after the IAEA Board of Governors — the U.N.’s nuclear watchdog — passed a resolution declaring Iran in noncompliance with its nuclear safeguards obligations for the first time in nearly 20 years.

In posts on social media platform X, Iranian supreme leader Ayatollah Ali Khamenei vowed a heavy response to Israel’s attacks.

“That [Zionist] regime should anticipate a severe punishment. By God’s grace, the powerful arm of the Islamic Republic’s Armed Forces won’t let them go unpunished.”

He wrote in a separate post: “In the enemy’s attacks, several commanders and scientists have been martyred. God willing, their successors and colleagues will carry on with their duties without delay.”

It is not yet known how and to what extent Iran will be able to deploy its arsenal of ballistic missiles and network of regional armed proxies in its efforts at retaliation.

source : cnbc

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Damon

Economic

Just days after CPI disappointed the the Trump Tariff infation fear-mongers once again and a month since the UMich survey found that "Women, Democrats, & Low-Income Americans Are Out Of Their TDS-Addled Minds", and one week after Goldman finally called out the idiocy of the UMich survey, slamming its "partisanship" and the "sample design break starting from June 2024"...

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_1

not to mention that it has been chronically wrong, warning that "Michigan inflation expectations have already risen even more than in 2022 and this time long-term expectations have risen sharply too, all before tariffs have even meaningfully boosted consumer prices" while "technicalities have exaggerated the increase in the Michigan [inflation] survey, as other survey measures and market-implied inflation compensation have not risen much at horizons beyond the next year", moments ago the preliminary UMich survey for the month of June saw sharp revisions to the prelim prints, to wit:

The headline Sentiment print jumped dramatically from its lowest since May 1980 - to 60.5, well above the median estimate of 53.6
The Current Conditions print also surged from 58.9 to 63.7, well above expectations.
The Expectations print spiked to 58.4 from 47.9 and above the median estimate of 49.7

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_2

Source: Bloomberg

These trends were unanimous across the distributions of age, income, wealth, political party, and geographic region. Moreover, all five index components rose, with a particularly steep increase for short and long-run expected business conditions, consistent with a perceived easing of pressures from tariffs. Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed.

Inflation Expectations finally gave way to reality with 1Y expectations falling from 6.6% to 5.1%...

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_3

Source: Bloomberg

However, 'Tariff Derangement Syndrome', as Treasury Secretary Scott Bessent called it, was very evident as Democrats' inflation expectations surged even higher to a ridiculous 10.1% over the next year!

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_4

Source: Bloomberg

The longer-term inflation expectation also fell overall but both Independents and Democrats

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_5

Source: Bloomberg

One more for fun - comparing Democrats view of the inflationary outlook to the 'hard' inflationary data...

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_6

Source: Bloomberg

The percentage of UMich respondents making unsolicited negative comments about news they've heard on government economic policy remains just shy of record highs...

UMich Sentiment Surges Higher In Early June, But 'Tariff Derangement Sydrome' Remains_7

Source: Bloomberg

But, as we tweeted, this farcical data makes no sense...

We look forward to UMich explaining that... did they change the weighting of Democrats' TDS-addled views? (and not tell anyone?)

Source: Zero Hedge

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Adam

Commodity

Your Crisis Trading Playbook – Profits From Chaos

Six hours into the biggest oil shock since 2020, clear winners and losers emerge. Smart money rotates aggressively while retail traders chase yesterday’s moves. Here’s your actionable guide to trading history’s next energy crisis.

Energy Equities Beat Futures – Why Leverage Without Contango Wins

Forget fighting futures roll costs in super-backwardation. Integrated oil majors offer cleaner exposure with massive operating leverage. Every $10 oil increase adds $15-20 billion to ExxonMobil’s annual cash flow. Chevron prints money above $80 Brent.

The equity options market remains relatively calm versus futures volatility. XOM January $120 calls cost half the implied volatility of equivalent crude calls. That’s free leverage to triple-digit oil without theta decay eating returns.

Avoid pure upstream plays paradoxically. Shale producers hedge 60-80% of production at lower prices. Their gains cap out while integrated majors with downstream assets capture full margin expansion. ConocoPhillips beats Pioneer Natural Resources in this environment.

European oils trade at deeper discounts despite identical commodity exposure. Shell and BP offer 20% currency-adjusted discounts to American peers. TotalEnergies’ diverse gas portfolio provides additional upside. The arbitrage closes violently in sustained rallies.

Shipping and Storage – The Overlooked Profit Centers

Tanker equities exploded 15% today but remain cheap versus spot rate reality. Frontline trades at 0.7x NAV despite VLCC rates printing $100,000 daily. Management will declare special dividends if rates hold above $50,000 for a quarter.

Product tankers outperform crude carriers in Middle East conflicts. Scorpio Tankers and Torm benefit from gasoline/diesel shipment disruption. These smaller vessels command proportionally higher war premiums. Operating leverage exceeds VLCCs at current rate levels.

Storage plays activate above $85 oil. Vopak and Kinder Morgan own strategic terminals near refineries. Contango might seem impossible now, but supply releases create temporary gluts rewarding storage capacity. These defensive positions hedge against mean reversion.

FLEX LNG captures forgotten LNG disruption. Qatar exports 20% of global LNG through Hormuz. Any interference spikes European gas prices given Russian supply loss. LNG shipping rates could triple overnight in worst-case scenarios.

The Contrarian Shorts – Betting Against Extended Disruption

Airlines entering death spirals above $100 oil. United Airlines burns $50 million extra monthly per $10 oil increase. Low-cost carriers like Spirit lack pricing power to pass through costs. Chapter 11 looms for weakest players at sustained triple-digit crude.

Chemicals face margin apocalypse. LyondellBasell uses oil-based feedstocks while competitors use cheaper natural gas. Every $10 oil increase costs $500 million annually. The stock ignores this reality, creating asymmetric short opportunities.

Emerging market currencies collapse as oil import bills explode. Turkish lira and Indian rupee face 20% devaluation risks at $120 oil. Short these currencies against USD provides macro hedge against equity longs.

Tesla paradoxically suffers initially. EV demand requires functioning economies. Recession from oil shock delays purchases despite improved relative economics. The stock’s beta to broad markets overwhelms fundamental benefits. Wait for capitulation before buying.

Risk Management in Violent Markets – Survival Before Profits

Position sizing matters more than direction. This environment produces 10% daily moves. Size for total portfolio impact, not individual trade metrics. Risk 0.5% per idea versus normal 2% allocations.

Use options spreads over outright positions. Bull call spreads capture upside while defining risk absolutely. Selling further strikes finances premium in volatile markets. Iron condors profit from eventual stabilization.

Trail stops aggressively on winners. The Israeli attack news saw algorithms gun stops before reversing higher. Use mental stops or alerts rather than visible orders. Market makers hunt obvious levels in thin conditions.

Most importantly – plan your exit before entering. Whether Iran retaliates determines everything. Define scenarios triggering position reduction. This crisis rewards disciplined process over conviction.

Markets gave you a gift today – clear inefficiencies from forced repositioning. But gifts turn to traps without proper risk management. Trade the opportunity while respecting the unprecedented nature of current events.