Morning Wrap - Oil Resumes Climb (24.03.2026)

Situation in the Middle East

• Donald Trump indicated in a Monday speech that a deal with Iran is close, leading to the suspension of a planned strike on the country’s energy infrastructure. The attack was originally scheduled to commence at midnight UK time.

• The US President specified that an agreement must be signed within 5 days; otherwise, the United States will resume the bombardment of Iran's key strategic infrastructure.

• Although Tehran denied that such negotiations are taking place—triggering a return of negative market sentiment—it is worth noting a similar pattern occurred last year with China. At that time, Trump claimed a deal was imminent and suspended extreme tariffs; China initially denied it, but a formal agreement was reached just two weeks later.

• This situation demonstrates that the United States seeks a swift resolution to the conflict, which has caused extreme volatility in financial markets, particularly in the oil market where prices have surged back above 100 USD per barrel.

• Israel is continuing its military operations, while Iran persists with retaliatory strikes. Amazon has reported disruptions to AWS services in Bahrain due to Iranian drone activity.

• The Fars news agency reports extensive damage to gas and power infrastructure across the country.

• According to the Wall Street Journal, Arab nations are moving toward deeper involvement. Saudi Arabia has allowed the US Air Force to use its key airbase, having diversified its oil exports via a westward pipeline. King Mohammed bin Salman is also considering direct military intervention.

• The United Arab Emirates is shutting down all businesses linked to Iran, aiming to sever all financial and economic ties.

• Brent crude oil is currently trading at 99.8 USD per barrel, following the futures contract rollover on March 17.

• Gold has fallen back below 4400 USD per ounce, marking a 2% loss, while silver has dropped approximately 4% to 66 USD per ounce. These losses in precious metals are tied to concerns over rising inflation.

• The World Gold Council issued a statement confirming that central banks intend to continue purchasing gold this year. This is likely a response to rumors that Middle Eastern central banks might sell gold to address liquidity issues following the disruption of cash flows from hydrocarbon sales.

Data and Other Events

• American indices rebounded strongly during yesterday's session, but today the US100 and US500 are down by approximately 1% amid ongoing uncertainty.

• Chinese index futures are losing over 1%, the Australian AUS200 is down 1.7%, and the Japanese JP225 has dropped nearly 2.7%.

• The EURUSD remains elevated, trading just below the 1.16 level.

• Japan's manufacturing PMI slowed to 51.4 from a previous 53. While a cooling economy is challenging for the Bank of Japan, an interest rate hike in April remains highly probable given the current rebound in energy prices.

• Japan’s CPI inflation unexpectedly fell to 1.3% y/y, missing expectations of 1.5% and down from the previous 1.5%.

• An energy crisis is becoming increasingly visible in Asian nations. The South Korean Energy Minister indicated he will ease restrictions on coal power plants, restart nuclear plants currently undergoing maintenance, and introduce restrictions on non-essential vehicle use.

• The EU and Australia have signed a trade agreement removing most tariffs and restrictions. This is expected to generate savings of 1 trillion EUR annually and increase Europe’s access to critical minerals, such as rare earths.

• Anna Breman, head of the RBNZ, noted that the current situation is fueling financial tensions, but emphasized that New Zealand's interest rates are at a level that allows for movement in either direction depending on how the situation evolves.

• According to the RBNZ chief, even a swift end to the war will not change the current reality and will likely limit the potential for global growth.

• Austan Goolsbee of the Fed indicated that he sees potential grounds for further interest rate hikes in the US.