Rising Expectations of a Prolonged Conflict Push Oil Prices and Inflation Risks Higher

Daily News

Summary:

There is no timeline for ending the Iran conflict; after 54 days of confrontation, both the U.S. and Iran signal readiness to resume military action...

Key Highlights

Trump: No timeline for ending the conflict with Iran

U.S. military needs six months to clear mines in the Strait of Hormuz

Zelensky: Little progress expected in Russia–Ukraine talks before Iran conflict ends

After 54 days of standoff, both the U.S. and Iran say they are ready to resume fighting

New Zealand’s recovery delayed but not derailed; inflation could reach 7.4% under extreme oil prices

Japan’s April manufacturing PMI hits a four-year high

Details

Trump: No Timeline for Ending the Conflict with Iran

On the 22nd, U.S. President Donald Trump said in an interview with Fox News that there is currently no timeline for ending the conflict with Iran, and there is no urgency to do so. He rejected claims that he is rushing to end the conflict for midterm elections, calling them untrue.

He also dismissed earlier reports suggesting a 3–5 day window to extend the ceasefire, stating that there is no time pressure regarding a ceasefire.

Earlier that day, Axios reported that Trump was willing to extend the ceasefire by an additional 3–5 days to allow Iran time to respond, but emphasized that the ceasefire would not be extended indefinitely.

U.S. Military Needs Six Months to Clear Mines in the Strait of Hormuz

The Washington Post reported on the 22nd that the Pentagon has assessed it would take the U.S. military six months to fully clear naval mines deployed by Iran in the Strait of Hormuz. Mine-clearing operations are unlikely to begin before the conflict ends.

A senior Defense Department official made this assessment during a classified briefing to members of the House Armed Services Committee. The timeline has frustrated both Democratic and Republican lawmakers, as it suggests that the conflict’s impact on the U.S. economy—particularly fuel prices—could persist into later this year or beyond.

Zelensky: Little Progress in Russia–Ukraine Talks Before Iran Conflict Ends

Ukrainian President Volodymyr Zelensky said in an interview with U.S. media on the 22nd that while he remains open to a ceasefire with Russia, he does not expect meaningful progress in peace talks until the Iran conflict is resolved and a final ceasefire is reached between the U.S., Israel, and Iran.

According to Interfax-Ukraine, Zelensky acknowledged the U.S. focus on Iran but stressed that Ukraine must not be overlooked. He said the Ukraine conflict cannot be deferred and called for a parallel resolution to both crises.

After 54 Days of Standoff, Both Sides Signal Readiness to Resume Fighting

On the 22nd, the U.S.–Iran confrontation entered its 54th day. The U.S. maritime blockade of Iran has become a key obstacle in negotiations.

Iran’s armed forces stated they are fully prepared for combat, while senior U.S. military officials said they are ready to resume operations against Iran at any time.

On the evening of the 21st, Iran showcased missile systems including “Qadr” and “Khorramshahr-4” in Tehran, signaling that its missile capabilities are fully operational and ready.

Reports indicate that Iran has considered the likelihood of renewed conflict to be high over the past two weeks, conducting military adjustments and preparing a new list of strike targets.

New Zealand Recovery Delayed; Inflation Could Reach 7.4% Under Extreme Oil Prices

New Zealand Finance Minister Nicola Willis said on Wednesday that the country’s economic recovery has been delayed but remains on track. The oil price shock triggered by the Iran conflict has pushed up fuel costs and weakened business and consumer confidence.

The Treasury projects that in a worst-case scenario—where oil prices average $180 per barrel—inflation could reach 7.4% in the 2025/26 fiscal year, although such a scenario is considered unlikely. In a more optimistic case, with oil averaging $110 per barrel, inflation could be around 3.9%.

Japan’s Manufacturing PMI Hits Four-Year High in April

Japan’s preliminary manufacturing PMI for April rose to 54.9, the highest level since January 2022 (up from 51.6 in March). The output sub-index recorded its strongest increase since February 2014, as firms ramped up production amid concerns over potential supply shortages stemming from Middle East tensions.

The services PMI fell from 53.4 in March to 51.2, marking the slowest expansion in 11 months. The composite PMI declined from 53.0 to 52.4, as the slowdown in services offset gains in manufacturing.

Price pressures in the private sector intensified, with input costs rising at the fastest pace since January 2023 and output prices increasing at the fastest rate on record. Business confidence weakened for a second consecutive month, falling to its lowest level since August 2020.

Today’s Focus

15:15 (UTC+8) France April Manufacturing PMI (Preliminary)

15:30 (UTC+8) Germany April Manufacturing PMI (Preliminary)

16:00 (UTC+8) Eurozone April Manufacturing PMI (Preliminary)

16:30 (UTC+8) UK April Manufacturing PMI (Preliminary)

21:45 (UTC+8) U.S. S&P Global April Manufacturing PMI (Preliminary)

23:00 (UTC+8) Remarks by ECB Governing Council member Nagel

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