US Boosts Military Presence in the Middle East, Heightening Geopolitical Risks; IEA Ready to Release More Oil Reserves

Daily News

Summary:

The US is deploying a third aircraft carrier and approximately 10,000 additional personnel to the Middle East; the IEA is prepared to coordinate further emergency oil releases.

Highlights

1. Iran: Talks Require the US to End Pressure, Threats, and Sanctions

2. US to Deploy a Third Aircraft Carrier and Approximately 10,000 Additional Personnel to the Middle East

3. Iranian Defense Minister Says Iran Is Preparing for a Fourth Round of War

4. US Treasury Secretary Bessent Expects No Spillover From Turmoil in France's Bond Market

5. IEA Ready to Coordinate Further Emergency Oil Releases

6. US Housing Starts Unexpectedly Fall 5.2% in September

Details

Iran: Talks Require the US to End Pressure, Threats, and Sanctions

On October 20, local time, Iranian President Masoud Pezeshkian said during a meeting with Pakistan's Chief of Army Staff, Asim Munir, that all the region's problems, ranging from escalating tensions and conflicts to disruptions in the Strait of Hormuz, had been caused by US aggression.

He said the US could not simultaneously intensify sanctions and pressure, impose a blockade on Iran, and claim to seek dialogue and negotiations. Iran had been and remained willing to engage in dialogue, but the US must first lift its threats and sanctions before talks could begin. If Washington genuinely sought dialogue and an agreement, its current actions were completely contradictory to its stated intentions and made no logical sense.

Pezeshkian stressed that the US could never achieve its objectives through war. Instead, war would only cause destruction and losses, not just for Iran but for the entire region. He said this was something Iran absolutely did not want to see.

US to Deploy a Third Aircraft Carrier and Approximately 10,000 Additional Personnel to the Middle East

The Associated Press (AP), citing two US officials, reported that the USS Theodore Roosevelt carrier strike group and the 13th Marine Expeditionary Unit were expected to arrive in the Middle East by the end of November. The Roosevelt will join the USS Bush, which was deployed in April, and the USS Washington, which arrived in August to replace the USS Lincoln.

The Roosevelt departed San Diego, California, on Sunday, September 27, while the 13th Marine Expeditionary Unit set sail the following day aboard the amphibious assault ship USS Makin Island. The Roosevelt carrier strike group carries approximately 6,000 sailors, while the Marine expeditionary unit and the amphibious assault ship together involve approximately 4,200 personnel.

According to The Wall Street Journal, President Donald Trump is seriously considering resuming bombing operations against Iran after the November midterm elections. The White House has instructed the military to develop strike plans targeting Iran's energy infrastructure and nuclear facilities. US officials are reportedly assessing the possibility of using large airburst bombs.

Iranian Defense Minister Says Iran Is Preparing for a Fourth Round of War

On October 19, Iran's newly appointed Defense Minister, Mehrdad Ahraghi, said the country was preparing for a fourth round of war.

On the same day, Mohammad Mohebi, a spokesperson for Iran's Islamic Revolutionary Guard Corps (IRGC), said that seven major undersea cables pass through the Strait of Hormuz and that global internet connectivity and commercial data depend on them. He said Iran was reminding its adversaries that they needed to be aware of this fact.

US Treasury Secretary Bessent Expects No Spillover From Turmoil in France's Bond Market

US Treasury Secretary Scott Bessent said he did not expect turmoil in France's bond market to spill over into other markets. French bond yields had surged, prompting broader concerns about the European country's fiscal position.

"I don't expect the situation in France to have spillover effects on other markets," Bessent said on Tuesday. He acknowledged that France was facing difficulties but praised the economic team of French President Emmanuel Macron, saying he knew the team very well and considered it highly capable.

France has been gripped by a wave of protests in recent weeks, with unrest escalating over the weekend and placing unexpected pressure on the government. The turmoil has further aggravated the country's debt problems, with French debt underperforming that of comparable countries as the government struggles to rein in its budget deficit.

Bessent said the situation was not what the US had anticipated. However, he noted that capital was flowing into US Treasuries as investors sought safe havens amid concerns about certain countries.

IEA Ready to Coordinate Further Emergency Oil Releases

The head of the International Energy Agency (IEA) said the agency was prepared to coordinate additional emergency oil releases by member countries if necessary. It was also working to accelerate the release of diesel under existing plans to help curb surging prices.

Supply disruptions from the Gulf region and Russia have driven diesel prices to record highs in many markets, including the United States. Last week, the IEA, which coordinates emergency oil stock releases among industrialized nations, announced that it would accelerate the release of crude oil and petroleum products pledged in March. This includes releasing more than 20 million barrels of diesel as soon as possible.

IEA Executive Director Fatih Birol said releasing the 20 million barrels of diesel was an urgent priority. The timing would depend on individual countries' circumstances and market conditions. The agency was working to bring forward deliveries of the diesel.

Birol said member countries had so far released 80% of the record 400 million barrels of crude oil and refined petroleum products they had pledged to make available to the market.

In its latest Oil Market Report, the IEA also said tightness in the global diesel market could persist into next year, with elevated oil prices potentially adding to inflationary pressures. Birol said there was no credible reason to believe that 2027 would mark a return to normal conditions.

US Housing Starts Unexpectedly Fall 5.2% in September

US housing starts fell 5.2% in September, defying market expectations for a 1.9% increase. The previous reading showed a 2.6% decline.

On an annualized basis, housing starts totaled 1.221 million units in September, compared with market expectations of 1.305 million and the previous reading of 1.275 million.

Building permits fell 0.2% in September, compared with market expectations for a 1.3% decline and a previous decrease of 2.1%. On an annualized basis, building permits totaled 1.4 million units, compared with market expectations of 1.395 million and the previous reading of 1.403 million.

Today's Economic Calendar

14:00 (UTC+8) UK CPI for September

16:00 (UTC+8) Speech by ECB Executive Board Member Piero Cipollone

21:00 (UTC+8) Speech by Bank of England Governor Andrew Bailey

00:00 (UTC+8) Speech by ECB President Christine Lagarde

05:45 (UTC+8) New Zealand CPI (YoY) for Q3

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