Donald Trump's address to the nation triggered a new round of panic: instead of the expected details of a peace plan, markets heard a promise to continue the military campaign against Iran.
World oil prices have soared, rising more than $6 per barrel, Reuters reports.
At the time of writing, benchmark Brent crude futures jumped $6.60 (or 6.53%), reaching a threatening $107.77 per barrel. The American benchmark WTI soared $6 (or 6%), settling at $106.20 per barrel.
Notably, both benchmarks were trading lower before Trump's speech, continuing the correction from the previous session. Investors were hoping for a softer White House rhetoric, but the reality turned out to be different. "We're going to get this done, and we're going to get it done very quickly. We're very close," Donald Trump said in his address. The president noted that the US military has nearly achieved its stated objectives, and the conflict could end within two to three weeks, but he did not provide any specific details or terms for a ceasefire.
It was this lack of diplomatic specifics that disappointed investors.
"Markets are reacting sharply to the fact that the speech did not include any clear mention of a ceasefire or diplomatic engagement," explains Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova. "If tensions escalate or maritime risks increase, oil could test new highs as markets begin pricing in potential disruptions to physical supply."
Traders' fears are fueled by the ongoing escalation on land and at sea. Threats to international shipping are growing daily. On Wednesday, the Qatari Ministry of Defense reported that an oil tanker chartered by the state-owned Qatar Energy Corporation was hit by an Iranian cruise missile just inside the emirate's territorial waters.
The situation is further exacerbated by macroeconomic forecasts. International Energy Agency Director General Fatih Birol issued a stern warning: real disruptions in energy supplies will begin to hit the European economy as early as April. Until now, the Old World has been protected from the consequences of the war thanks to oil and gas shipments contracted and shipped to Europe before the outbreak of hostilities in the Middle East. Now this buffer has been exhausted.