Latest news with #StraitOfHormuz
Yahoo
5 hours ago
- Business
- Yahoo
Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Stocks rallied on Tuesday after US President Trump said that a "complete and total ceasefire" between Iran and Israel would take effect in the coming hours. Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment. The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend. In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided. About 20% of global oil and gas flows through this narrow shipping lane in the Gulf. Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87. Last week, Brent reached over $78 a barrel, a level not seen since the start of this year. Related Why the Strait of Hormuz remains critical for the global economy The dollar sees a rebound after US strikes Iran, but can it continue? European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading. The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97. Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00. Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89. Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39. The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback. Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent. Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'. Error while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
5 hours ago
- Business
- Yahoo
Why the Strait of Hormuz remains critical for the global economy
As oil prices are climbing after the attacks on Iran by Israel and then the US, investors are closely watching the fate of a narrow sea passage in the Middle East. The Strait of Hormuz is vital for gas and oil exporters in the Gulf region, as this is the only route by sea to export large volumes of oil and gas produced among the oil-rich countries in the region. This narrow passage is located between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is about 167 km long, and at its narrowest point, 39 km wide. According to the Joint Maritime Information Centre, June 2024 averaged 114 vessels transiting the strait daily and so far traffic in June 2025 is consistent with this. On 21 June, for instance, there were 122 vessels passing through the strait. The passage is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints (narrow channels along widely used global sea routes that are critical to global energy security). Related Oil price drops, shares jump as Trump announces Israel-Iran ceasefire Israel-Iran conflict fuels best month for energy stocks since 2022 The health of the world economy depends on the flow of oil from this region. Oil tankers on average carry through the strait 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption, according to the US Energy Information Administration analysis. 'A potential Iranian blockade of the Strait of Hormuz would send shockwaves through the global economy," Professor Guido Cozzi, Chair of Macroeconomics at the University of St. Gallen, said to Euronews. He added that any disruption to the oil flow in this narrow waterway would drive up energy prices, fuel inflation, and strain supply chains. Related What's at stake for Europe if the Strait of Hormuz is blocked? Continental Europe and China are losing the most, both heavily reliant on imported energy and lacking domestic buffers. "They would face rising costs, slower growth, and heightened inflation without any upside," Cozzi said. Meanwhile, the US and the UK would see their exports become more competitive, as they are sourcing the majority of their energy from elsewhere. And if the strait would be closed, pushing prices up globally, that would benefit Western producers more than it would harm them, according to the professor. Besides oil, global natural gas supply could also be seriously impacted, as Qatar, one of the world's biggest natural gas exporters uses the narrow seaway to export about 77 million metric tons of liquefied natural gas (LNG) a year. This is one-fifth of the global LNG supply. "Alternative supply routes for Middle Eastern oil and gas are limited, with pipeline capacity insufficient to offset potential maritime disruptions through the Persian Gulf and Red Sea,' S&P said in an analysis. 'Any Iranian closure of the Strait of Hormuz would affect not only its own exports but also those of Saudi Arabia, the UAE, Kuwait and Qatar, potentially removing over 17 million b/d of crude oil from global markets,' added the analysis, saying that Saudi Arabia and the UAE have pipelines that can circumvent the strait. Analysts expect oil prices to skyrocket and surpass $100 a barrel if Iran decides to close the passage. Though insurance for the oil tankers passing through the strait increased and the situation is quite tense, according to the Joint Maritime Information Centre, there are no indications of threats to commercial shipping. Related The dollar sees a rebound after US strikes Iran, but can it continue? After US attacks on three Iranian nuclear sites, on 22 June, the Parliament in Tehran voted to close down the strait. A step that has never been taken. The decision is pending approval by the Islamic Republic's Supreme National Security Council. Iran threatened several times in the past that it would cut this artery of oil in the past but it never followed through with the threat. US Vice-President JD Vance called the move 'suicidal' for Iran's economy on Sunday at a press conference. Creating a major disruption in the strait would be extremely difficult due to various economic, political and military forces present in the region today, said the Robert Strauss Center for International Security and Law in an analysis. Experts agree that Iran itself has a lot to lose and very little to gain as it would cut its own oil exports to major trade partners such as China. Besides losing a key source of revenue, Iran would also anger its oil-producing neighbours whose support they may not be able to afford to risk. Related Oil rises and Europe's markets open lower after US strikes on Iran If Iran decides to close the passageway, another question is, for how long? The duration could be key, as global stockpiles are currently sufficient. The nations in need have at least 5.8 billion barrels of crude and fuel stockpiled between them, according to Bloomberg. This shows a healthy buffer, compared to the annual 7.3 billion barrels a year, passing through the strait. According to Barclays, other possible scenarios include Iran trying to target the Strait of Hormuz using missile attacks, making ships and insurance firms hesitant to use Hormuz. They could also consider mining the strait, which would hit traffic to a greater extent. There are also less aggressive ways to further disturb commercial shipping through Hormuz. For instance, the widespread jamming of GPS signals could make it harder to navigate safely in certain conditions. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
5 hours ago
- Business
- Yahoo
Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Stocks rallied on Tuesday after US President Trump said that a "complete and total ceasefire" between Iran and Israel would take effect in the coming hours. Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment. The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend. In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided. About 20% of global oil and gas flows through this narrow shipping lane in the Gulf. Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87. Last week, Brent reached over $78 a barrel, a level not seen since the start of this year. Related Why the Strait of Hormuz remains critical for the global economy The dollar sees a rebound after US strikes Iran, but can it continue? European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading. The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97. Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00. Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89. Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39. The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback. Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent. Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'.
Yahoo
5 hours ago
- Business
- Yahoo
Why the Strait of Hormuz remains critical for the global economy
As oil prices are climbing after the attacks on Iran by Israel and then the US, investors are closely watching the fate of a narrow sea passage in the Middle East. The Strait of Hormuz is vital for gas and oil exporters in the Gulf region, as this is the only route by sea to export large volumes of oil and gas produced among the oil-rich countries in the region. This narrow passage is located between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is about 167 km long, and at its narrowest point, 39 km wide. According to the Joint Maritime Information Centre, June 2024 averaged 114 vessels transiting the strait daily and so far traffic in June 2025 is consistent with this. On 21 June, for instance, there were 122 vessels passing through the strait. The passage is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints (narrow channels along widely used global sea routes that are critical to global energy security). Related Oil price drops, shares jump as Trump announces Israel-Iran ceasefire Israel-Iran conflict fuels best month for energy stocks since 2022 The health of the world economy depends on the flow of oil from this region. Oil tankers on average carry through the strait 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption, according to the US Energy Information Administration analysis. 'A potential Iranian blockade of the Strait of Hormuz would send shockwaves through the global economy," Professor Guido Cozzi, Chair of Macroeconomics at the University of St. Gallen, said to Euronews. He added that any disruption to the oil flow in this narrow waterway would drive up energy prices, fuel inflation, and strain supply chains. Related What's at stake for Europe if the Strait of Hormuz is blocked? Continental Europe and China are losing the most, both heavily reliant on imported energy and lacking domestic buffers. "They would face rising costs, slower growth, and heightened inflation without any upside," Cozzi said. Meanwhile, the US and the UK would see their exports become more competitive, as they are sourcing the majority of their energy from elsewhere. And if the strait would be closed, pushing prices up globally, that would benefit Western producers more than it would harm them, according to the professor. Besides oil, global natural gas supply could also be seriously impacted, as Qatar, one of the world's biggest natural gas exporters uses the narrow seaway to export about 77 million metric tons of liquefied natural gas (LNG) a year. This is one-fifth of the global LNG supply. "Alternative supply routes for Middle Eastern oil and gas are limited, with pipeline capacity insufficient to offset potential maritime disruptions through the Persian Gulf and Red Sea,' S&P said in an analysis. 'Any Iranian closure of the Strait of Hormuz would affect not only its own exports but also those of Saudi Arabia, the UAE, Kuwait and Qatar, potentially removing over 17 million b/d of crude oil from global markets,' added the analysis, saying that Saudi Arabia and the UAE have pipelines that can circumvent the strait. Analysts expect oil prices to skyrocket and surpass $100 a barrel if Iran decides to close the passage. Though insurance for the oil tankers passing through the strait increased and the situation is quite tense, according to the Joint Maritime Information Centre, there are no indications of threats to commercial shipping. Related The dollar sees a rebound after US strikes Iran, but can it continue? After US attacks on three Iranian nuclear sites, on 22 June, the Parliament in Tehran voted to close down the strait. A step that has never been taken. The decision is pending approval by the Islamic Republic's Supreme National Security Council. Iran threatened several times in the past that it would cut this artery of oil in the past but it never followed through with the threat. US Vice-President JD Vance called the move 'suicidal' for Iran's economy on Sunday at a press conference. Creating a major disruption in the strait would be extremely difficult due to various economic, political and military forces present in the region today, said the Robert Strauss Center for International Security and Law in an analysis. Experts agree that Iran itself has a lot to lose and very little to gain as it would cut its own oil exports to major trade partners such as China. Besides losing a key source of revenue, Iran would also anger its oil-producing neighbours whose support they may not be able to afford to risk. Related Oil rises and Europe's markets open lower after US strikes on Iran If Iran decides to close the passageway, another question is, for how long? The duration could be key, as global stockpiles are currently sufficient. The nations in need have at least 5.8 billion barrels of crude and fuel stockpiled between them, according to Bloomberg. This shows a healthy buffer, compared to the annual 7.3 billion barrels a year, passing through the strait. According to Barclays, other possible scenarios include Iran trying to target the Strait of Hormuz using missile attacks, making ships and insurance firms hesitant to use Hormuz. They could also consider mining the strait, which would hit traffic to a greater extent. There are also less aggressive ways to further disturb commercial shipping through Hormuz. For instance, the widespread jamming of GPS signals could make it harder to navigate safely in certain conditions. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The National
16 hours ago
- The National
The rise of GPS jamming - and why you may not be where your smartphone says you are
As tension between Iran and Israel reached a crescendo last week, people in countries throughout the Middle East reported their smartphones had changed time zones to that of Iran. Several people also noted that apps such as Snapchat and Instagram had changed their locations to Iran. Although impossible to prove, it is probably the result of Global Positioning Satellite jamming, also known as GPS spoofing. This is often used for defence and planning purposes, with opposing militaries or groups trying to disrupt signals sent by navigation and location-based systems to gain a strategic advantage. Iran and Israel have used GPS jamming in the past, and they or proxy groups could be to blame for the jamming. But with so many different entities trying to exert influence in the region at any given time, particularly in the latest conflict, it's almost impossible to figure out who was doing it this time. While the conflict appears to have ended with a US-orchestrated ceasefire, users are still reporting problems. And it is not just smartphone users who have noticed the glitch. According to maritime insights and data provider Windward, 'approximately 970 ships per day have experienced Global Positioning Satellite jamming in the Arabian Gulf and Strait of Hormuz' since Israel first attacked Iran about two weeks ago. In the shipping sector, the interruption of GPS data can mean costly delays that add up quickly. The International Air Transport Association and EU Aviation Safety Agency have sought in recent months to address the problem as it continues to occur around the world. But SandboxAQ, which works at the junction of quantum technology and artificial intelligence, says that GPS jamming shows no sign of slowing down. 'We've seen that as the geopolitical climate has evolved, the prevalence and severity of GPS interference has ramped massively," said Luca Ferrara, a manager for SandboxAQ's navigation business unit. "This has gone from a niche issue to a global one, and we've seen a commensurate increase in interest in our AQNav solution as a result." SandboxAQ's proprietary system provides an "unjammable" and "terrain agnostic" solution to the problem, the company says. Mr Ferrara said that the recent GPS jamming incidents in the Middle East, along with similar spoofing incidents affecting ships and aviation around the world, have piqued interest in his company's product. "We are accelerating our product introduction into the market to meet this urgent need," he told The National. Jack Hidary, chief executive at SandboxAQ, said that the increasingly prevalent problem of GPS jamming is of great concern in the context of civilian air travel safety, national security and overall defence. "Jamming is used as a weapon and as a tool to dominate airspace and dominate region and hegemony," he told The National. Mr Hidary said sometimes militaries will go as far as spoofing their own GPS, known as defensive jamming, as a way to confuse and possibly redirect incoming missiles. Offensive jamming, he said, involves spoofing other GPS systems to make it more difficult for countries or groups to position airplanes and drones. Mr Hidary said that GPS spoofing is mostly taking place in areas of Ukraine, Russia, the Arabian Gulf and the Indo-Pacific. He said the very things that make GPS so easily adopted across technology devices are the same things that make it so brittle and susceptible to jamming. "A high school student with the right tool can block or jam a GPS," he said. Homayoun Falakshahi, head of crude oil analysis at the Kpler data firm, said there may be several entities trying to spoof the GPS navigation systems and that their motives could differ. "Maybe it was the Iranians to make the passage around the Strait of Hormuz less safe, and in turn freight costs would increase and it would have another bullish impact on oil prices," he said during a panel discussion hosted by the Washington Institute. "Maybe it was the ship operators themselves because they didn't want their location to be seen by Iran, thinking they could get attacked." He noted that GPS spoofing could also cause ships to crash. Regardless of who is doing the GPS jamming, the inconveniences stemming from it are starting to add up. A Bahrain Reddit thread shows ample curiosity about the sudden appearance of Iran's time zone on smartphones. "I left the house a lot earlier than needed to this morning 'cause my phone time was wrong," wrote one user. "A friend's vehicle tracking system was showing his Bahrain truck on the west coast of Iran," said another Reddit user. On Facebook, there are also posts from smartphone users in the UAE pointing out the problem, along with speculation as to what the cause might be. "Tropospheric ducting, usually during temperature inversions, can cause a cell signal to bounce hundreds of miles further than normal, and since you are in a tall building, there are no obstructions between you and Iran. It's totally possible," wrote a user in the Abu Dhabi Expats group. Another user dropped a link to which shows the parts of the world that are experiencing the most discrepancies with GPS data on smartphones and other devices. While the consequences from GPS spoofing for average smartphone users pale in comparison to the shipping or aviation industry, Mr Hidary said those problems are vast and need to be addressed. "We all use the same airspace," he said. "We all depend on reliable transportation, either for ourselves travelling and/or for cargo to come in, and inherently we're all dependent on a strong navigation system to make that happen."
