Morning Wrap - Oil Resumes Climb (24.03.2026)
OIL: Brent crude oil is trading at $99.8 per barrel, reflecting a 3.01% increase. This rise is attributed to ongoing geopolitical tensions in the Middle East.
Geopolitical Situation
In a recent speech, US President Donald Trump indicated that a deal with Iran is imminent, leading to the suspension of a planned military strike on Iran's energy infrastructure. This strike was initially set to begin at midnight UK time. Trump emphasized that a formal agreement must be reached within five days; otherwise, the US will resume its military actions against Iran.
Despite Tehran's denial of ongoing negotiations, market sentiment has turned negative, reminiscent of last year's situation with China, where initial denials preceded a formal agreement shortly after. The US appears eager for a swift resolution to the conflict, which has significantly impacted financial markets, particularly oil prices, which have surged back above $100 per barrel.
Military Operations and Market Reactions
Israel continues its military operations, while Iran has been conducting retaliatory strikes. Notably, Amazon has reported disruptions to its AWS services in Bahrain due to Iranian drone activity. Reports from the Fars news agency indicate extensive damage to Iran's gas and power infrastructure.
Arab nations are reportedly increasing their involvement in the conflict. Saudi Arabia has permitted the US Air Force to utilize its key airbase, and King Mohammed bin Salman is contemplating direct military intervention. The UAE is also taking steps to sever all economic ties with Iran.
Market Overview
Gold prices have fallen below $4400 per ounce, marking a 1.27% decrease, while silver has dropped approximately 4% to $66 per ounce. These declines in precious metals are linked to rising inflation concerns. The World Gold Council has stated that central banks are expected to continue purchasing gold this year, likely in response to liquidity issues stemming from disruptions in hydrocarbon sales.
Economic Data and Global Indices
US indices rebounded strongly in the previous session, but today the US100 and US500 are down by about 1% amid ongoing uncertainty. Chinese index futures have also declined by over 1%, with the Australian AUS200 down 1.7% and the Japanese JP225 dropping nearly 2.7%.
The EUR/USD remains elevated, trading just below the 1.16 level. Japan's manufacturing PMI has slowed to 51.4, indicating a cooling economy, which poses challenges for the Bank of Japan. Despite this, an interest rate hike in April remains likely due to the rebound in energy prices. Japan's CPI inflation unexpectedly fell to 1.3% year-on-year, missing expectations.
In response to the energy crisis, South Korea's Energy Minister announced plans to ease restrictions on coal power plants and restart nuclear plants. Meanwhile, the EU and Australia have signed a trade agreement aimed at removing most tariffs, which is expected to save €1 trillion annually and enhance Europe's access to critical minerals.
Anna Breman, head of the RBNZ, noted that the current geopolitical tensions are fueling financial instability, but emphasized that New Zealand's interest rates are positioned to adapt based on evolving circumstances. Austan Goolsbee from the Fed indicated potential grounds for further interest rate hikes in the US.
Conclusion
The geopolitical landscape remains volatile, particularly in the Middle East, with significant implications for global oil prices and financial markets. Investors are advised to stay informed as developments unfold.