Tehran, Iran. Iran’s Revolutionary Guards said they would not allow any oil to leave the Middle East until U.S. and Israeli attacks cease, prompting U.S. President Donald Trump to threaten to hit Iran “twenty times harder” if it blocked exports. Investors nonetheless placed strong bets that Trump would end the war soon.
Oil threat and U.S. response
Iran’s Revolutionary Guards issued the warning on Tuesday, linking any oil exports out of the Middle East to the cessation of U.S. and Israeli attacks. Trump responded by threatening to strike Iran “twenty times harder” if it blocked exports.
Markets reverse part of oil surge
Despite defiant rhetoric from both sides, investors bet on Tuesday that Trump would call off the war soon, before disruptions to energy supplies trigger a global economic meltdown. After Trump described the war as “very complete, pretty much,” much of Monday’s historic surge in crude oil prices was reversed, and Asian and European share prices recovered on Tuesday from earlier sharp falls.
Strikes continue in Tehran
On the ground, Tehran residents reached by Reuters described intense U.S.-Israeli bombardment of the capital overnight as the fiercest of the war. One resident, speaking on condition of anonymity for security reasons, said the bombing was widespread and that their children were afraid to sleep and the family had nowhere to go.
Israel cites weapons target and plans for further strikes
Israel’s military said it hit a weapons research-and-development target in Tehran among a wave of overnight strikes, and launched more strikes later on Tuesday. A source familiar with Israel’s war plans told Reuters the Israeli military was seeking to inflict as much damage as possible before the window for further strikes closes, under the assumption Trump could end the war at any time.
Leadership dispute and Trump press conference
Iran has refused to meet Trump’s demand that it let the United States choose its new leadership, naming hardliner Mojtaba Khamenei as supreme leader to replace his father, who was killed on the war’s first day. Trump held a press conference on Monday that appeared to reassure markets he would stop the war before provoking an economic crisis like those that followed the Middle East oil shocks of the 1970s.
How do you think the threat to halt oil exports could affect energy markets in the coming days?
