President Trump’s administration has now reached the six‑month mark of the conflict with Iran that began when the Strait of Hormuz was effectively shut down on February 28. While the closure has cut roughly 20% of global energy flow, oil markets have shown unexpected resilience. Brent crude is trading just under $90 a barrel, above pre‑conflict levels but far from the triple‑digit prices many feared.
Oil flow and market impacts
U.S. Energy Secretary Chris Wright recently claimed more than 8 million barrels per day were still exiting the Gulf, but independent tracking suggests the figure is closer to 5 million barrels per day. Asian crude imports in August support the lower estimate. The real pressure now lies in refined products: European diesel margins are near record highs and gasoline markets remain tight, signaling potential price pressures through next year.
Diplomatic moves in the Middle East
Early this week, oil prices dipped after signs of diplomatic progress. Iran and Oman said they are finalizing an agreement to reopen the strait, while Qatar met with senior Iranian officials to discuss normalizing transit. These talks follow Treasury Secretary Scott Bessent’s “economic D‑Day,” in which the United States announced a sweeping sanctions package targeting Iranian entities and warned of secondary sanctions for countries that do not fully sever ties with Tehran.
New trade tension with Canada
While the Middle East remains a flashpoint, the Trump administration is also confronting a trade dispute with Canada. A deal the President previously announced as settled collapsed last Friday, triggering 50% tariffs on roughly $20 billion of Canadian goods, including lumber and dairy. Canadian Prime Minister Mark Carney responded with matching “dollar‑for‑dollar” levies. The White House has warned it will extend 50% tariffs to autos, trucks and auto parts beginning next year if a new agreement is not reached. Though a resolution is expected before the deadline, the standoff raises concerns about the future of the USMCA, the cornerstone trade pact with Canada and Mexico.
Wall Street and technology updates
On the domestic front, technology stocks provided a lift to U.S. equities. Nvidia reported a 70% revenue surge forecast for the next fiscal year, sending its shares up nearly 9% after announcing a $13 billion acquisition of AI platform Hugging Face. Salesforce and CrowdStrike also beat earnings expectations, raising revenue forecasts and bolstering the software sector.
Meta Platforms settled multiple state lawsuits over concerns about children’s social‑media use, agreeing to pay up to $18 billion over ten years and to impose stricter limits on teenage access to Facebook and Instagram.
Federal Reserve outlook
All eyes are on the Federal Reserve’s annual Jackson Hole symposium in Wyoming. The latest Personal Consumption Expenditures (PCE) index showed a 0.2% month‑over‑month rise in July, slightly above forecasts, with an annual increase of 3.7%. Bond yields rose modestly, with the 10‑year Treasury hovering around 4.7%.
Fed Chair Kevin Warsh, delivering his first major speech at the symposium, is expected to tread carefully after criticism of his recent press conference, which some argued questioned his commitment to the Fed’s inflation target. Warsh is likely to focus on ongoing task forces aimed at reforming the central bank’s communication and policy framework.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
