Latest developments in Iran conflict: Trump says the war is expected to end soon, oil prices retreat

Investing.com - U.S. President Donald Trump stated that the Iran war could end soon, but he also pointed out that Washington and Israel’s joint actions in the country may continue.

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Trump said Monday at a golf club in Florida that he expects the offensive to “end soon,” and threatened that if Iran attempts to block oil flow through the Strait of Hormuz, the U.S. will launch more attacks. The Strait of Hormuz is a critical waterway, with one-fifth of the world’s oil passing through it.

Trump added that he has considered controlling the strait. Disruptions caused by the conflict have already unsettled global markets and raised concerns about soaring worldwide inflation.

However, Trump stated that the U.S. “may go further, and we will go further.” Specifically, the president said that if Iran’s new Supreme Leader Mujeh Tabataba’i Khamenei refuses Washington’s demands, he will kill Khamenei. Mujeh Tabataba’i Khamenei is the son of Ali Khamenei, who was killed during the U.S.-Israel joint strike at the start of the conflict in February. It is believed that this candidate may continue Tehran’s hardline stance.

Reports indicate that Iran’s leadership has said that if the U.S. and Israel continue their attacks, they will not allow “a single barrel of oil” to pass through the strait. Iran’s foreign minister also denied the possibility of ceasefire negotiations with Washington.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said that the military offensive “is not over yet,” indicating that Israel’s goal remains to dismantle Iran’s clerical regime.

On Tuesday, Iran launched new attacks against Persian Gulf countries, while Israel struck multiple locations in Lebanon, continuing its operations against Iran-backed Hezbollah targets.

At the same time, Turkey’s defense ministry announced that NATO’s Patriot missile defense system has been deployed in southern Turkey after Iran launched two missile attacks against the country. On Monday, Iran’s second strike on Turkey was intercepted.

Oil Prices Retreat

Following Trump’s remarks, oil prices fell back from their highest levels since 2022, easing concerns among investors about global inflation driven by rising crude prices.

According to The Wall Street Journal, energy ministers from the G7 developed economies will hold talks on Tuesday. Earlier this week, G7 finance ministers discussed the potential release of emergency oil reserves to stabilize the oil market.

The prospect of a prolonged disruption of oil flow through the Strait of Hormuz pushed oil prices to nearly $120 per barrel on Monday, intensifying fears of accelerating global price increases, which could weaken expectations for central bank rate cuts and dampen overall growth. Bond yields subsequently rose, and stocks on Wall Street and overseas markets declined.

However, the reversal in oil prices triggered a chain reaction in the markets, leading to a decline in U.S. Treasury yields and gains in Asian and European stock markets. U.S. stock futures also pointed higher.

“In the most optimistic scenario—a severe but short-lived conflict—the impact on GDP, inflation, and monetary policy would be limited. In the worst-case scenario, a prolonged conflict causing significant damage to regional energy infrastructure could push the global economy into stagflation, making rate hikes again possible,” said analysts at Capital Economics in a report.

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.