0
0 NewsGhana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://www.newsghana.com.gh/markets-bet-economics-will-force-us-iran-deal/Financial markets are increasingly pricing in a diplomatic resolution to the US-Iran standoff, with analysts arguing that the threat of sustained triple-digit oil prices creates economic consequences Washington cannot afford to ignore.
That is the central argument from Nigel Green, chief executive of global financial advisory firm deVere Group, who says the failure of oil to enter full panic mode despite fresh American military strikes inside southern Iran reveals what investors actually believe: that economics will drive a deal before military escalation can spiral further.
Brent crude climbed back toward $100 a barrel on Tuesday following US operations against targets in southern Iran, which Washington described as acts of self-defence. President Donald Trump said talks with Tehran were advancing, while warning that a breakdown in negotiations could return the situation to open conflict at greater scale. Yet equity markets held relatively steady and oil stopped short of a sustained breakout above the psychological threshold.
“Markets increasingly believe economic pressure will force diplomacy to move faster than military escalation,” said Green.
A sustained move above $100 per barrel would feed directly into petrol prices, inflation expectations and Treasury yields simultaneously, three pressure points already under close watch by global investors. Green describes expensive energy as functioning like a tax on households and businesses, one that weakens consumption, compresses corporate margins and rekindles inflation at precisely the wrong moment for central banks.
The inflation dimension carries particular weight given current bond market sensitivity. Green noted that Treasury yields are now being tracked almost as closely as military developments in the Gulf, because another major energy shock could rapidly tighten financial conditions across equities, debt markets and currencies worldwide.
Senior US officials were reported earlier this week to have said negotiations were nearly complete. Secretary of State Marco Rubio underscored that the Strait of Hormuz must remain open, a statement markets read as further confirmation that Washington is acutely aware of what a prolonged supply disruption would mean for the broader economy.
Green concludes that financial markets have begun functioning as a geopolitical constraint in their own right, signalling that economic reality will determine the pace of resolution far more than military posturing.
NewsGhana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://www.newsghana.com.gh/markets-bet-economics-will-force-us-iran-deal/
