Oil prices eased on Friday while bonds were nursing losses, after global central bankers sounded the alarm on inflation risks stemming from the ongoing war in the Middle East. The conflict has spread to neighboring nations and impacted the global economy since the U.S. and Israel launched strikes on February 28 following failed nuclear program negotiations with Tehran.
Oil Prices Decline
Brent crude futures were down 3 percent at $105.43 a barrel this morning, while U.S. crude fell 2.2 percent to $94 per barrel, after leading European nations and Japan offered to join efforts to secure safe passage for ships through the Strait of Hormuz and the U.S. outlined moves to boost oil supply. Both benchmarks remained well above levels prior to the U.S.-Israeli war on Iran, having risen more than 40 percent this month.
Escalation of Conflict
Israel launched a fresh wave of attacks on Iran this morning, a day after President Donald Trump told it not to repeat its strikes on Iranian natural gas infrastructure. Israel targeted South Pars, prompting Tehran to retaliate with strikes on an energy complex in Qatar and other sites across the Gulf. Bahrain, Kuwait and the United Arab Emirates reported missile attacks in the early hours of Friday.
Warnings and Responses
Iranian Foreign Minister Abbas Araghchi said Tehran will not exercise any restraint if energy facilities are attacked again. “Our response to Israel’s attack on our infrastructure employed a fraction of our power. The only reason for restraint was respect for requested de-escalation,” Araghchi said in a post on X. “Zero restraint if our infrastructures are struck again.”
US Treasury Secretary Scott Bessent floated the idea of lifting sanctions on Iranian oil already at sea. “In the coming days, we may unsanction the Iranian oil that’s on the water. It’s about 140 million barrels,” Bessent said on Fox Business Thursday morning. Oil prices then dropped 1.56 percent to $94.64 a barrel.
Concerns Over Impact
Illinois Governor JB Pritzker has said U.S. service members and average Americans will “suffer” from the war in Iran. “I’m very fearful that there will be more troops sent there, that they’ll go into combat,” Pritzker told CNN’s Erin Burnett Thursday night. “We don’t need to be in this war. This should end. Now everybody’s gonna suffer, not just the people who are on the front lines, but also people all across the United States who are paying higher prices for gas.”
Natural gas prices have also soared, with those in Europe surging as much as 35 percent on Thursday, as Iranian and Israeli strikes targeted some of the Middle East’s most important gas infrastructure. President Trump told Israel not to repeat its attacks on Iranian natural gas infrastructure.
Differing Accounts
Benjamin Netanyahu said Israel had acted alone in the bombing of the South Pars gas field and confirmed that President Trump had asked Israel to hold off on such attacks. The father of a dead U.S. serviceman denied claims by Pete Hegseth that he told the Defense Secretary to “not stop until the job is done” – referring to the war in Iran.
The father, Charles Simmons, told NBC News in an interview Thursday, “I didn’t say anything along those lines. I can’t speak for the other families. When he spoke to me, that was not something we talked about.” Simmons is the father of 28-year-old Master Sergeant Tyler Simmons, who was among the six crew members killed last week when their refueling plane crashed in Iraq.
Japanese Prime Minister Takaichi said she and President Trump are “best buddies” in remarks following his Pearl Harbor joke. “A stronger Japan and a stronger America, a more prosperous Japan and a more prosperous America. I am very confident that Donald and I are the best buddies to realize this shared goal,” Takaichi said Thursday evening, speaking via a translator before a dinner event at the White House.
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