Dow falls 560 points, US oil surges to $90 as Trump demands Iran surrenders
Oil prices in the US surged to $90 a barrel on Friday following President Trump’s demand for unconditional surrender from Iran. This has raised concerns about a potential lasting conflict that could have global economic repercussions, as warned by Qatar’s energy minister.
Brent crude oil reached $86 a barrel, while West Texas Intermediate crude surpassed $90, resulting in a national average gasoline price of $3.32 per gallon, according to AAA. The Dow Jones Industrial Average, S&P 500, and Nasdaq all experienced declines on Friday.
Investors are worried about a prolonged conflict leading to Iran’s blockade of the vital maritime route, the Strait of Hormuz, which could impact gasoline prices and overall inflation. Despite this, President Trump remains unfazed by rising pump prices, stating that they will decrease once the conflict is resolved.
Qatar’s energy minister has raised concerns about all Gulf energy exporters shutting down within days, potentially pushing oil prices as high as $150 a barrel. He warned that such a scenario could have a significant negative impact on the global economy.
As the conflict disrupts oil supplies, the US issued a 30-day waiver for India to purchase Russian oil, reversing its previous stance. The Trump administration also offered political risk insurance for oil tankers in the Gulf and stated that further actions to reduce oil pressure are imminent.
While the US economy is considered strong enough to withstand temporary oil price shocks, the duration of the conflict remains a key concern for investors. If the conflict ends swiftly, there is hope for a quick recovery in crude prices; however, a prolonged conflict could further impact global oil prices and inflation.
