US stocks were flat on Tuesday with the Dow Jones Industrial Average down 0.1%. Investors were cautious as they weighed mixed signals on the duration of the military conflict in Iran and its impact on the global economy.
Crude oil prices were on a downward trend with Brent falling 7% to $92 a barrel. The decline was driven by optimistic statements from President Donald Trump that suggested the US military operation could end earlier than originally expected, allaying concerns about long-term supply disruptions.
However, tensions remained high after Defense Secretary Pete Hegseth warned of the most severe attack on Tehran. The speaker of Iran’s parliament insisted that the country would not seek a ceasefire, casting doubt on US claims of a quick victory.
G7 energy ministers are scheduled to hold a virtual meeting to discuss a large-scale release of strategic oil reserves. The international coordination measure, backed by the IEA, is aimed at stabilizing energy markets that are now facing systemic risks from the conflict.
Market analysts have warned that oil prices could surge above $120 if disruptions continue. The CEO of Saudi Aramco said the crisis could have a catastrophic impact on world markets if the Strait of Hormuz fails to function as a key trade route.
