Ira has officially banned uranium transfers abroad, thus rejecting one of the main demands of the US in peace talks. The price of oil has now returned above $100, with the conclusion of the US-Iran war still cloudy. As a result, a senior US official told Axios the new Iranian counteroffer has “only token improvements,” and if Iran won’t shift from its Uranium transfer ban, the US will continue negotiations “through bombs.”
Iran’s highly enriched uranium supply is at the heart of negotiations between the US and Iran. A failure to advance peace talks to end the Iran War only means that the Strait of Hormuz remains shut or impossible to navigate. As a result of the Strait of Hormuz closure, the oil supply worldwide will suffer, sparking a hike in oil prices. After a temporary dip below $100, oil is back above the mark, continuing its 40% surge since February 28. The price of oil hit as high as $107 earlier this week.
The longer the US-Iran war lasts, the longer oil prices will remain up, which is a key recession indicator according to experts. During the 2008 financial crisis, global oil prices experienced a historic boom and bust. Crude oil surged to an all-time high of $𝟏𝟒𝟕.𝟐𝟕 per barrel on July 11, 2008. To several analysts, we are witnessing that pattern again now, putting the US at risk of recession. Further, the world has burned through 1 billion barrels of oil from storage since February, more than a coordinated strategic reserve release in history.
Further, the ongoing war is also causing an oil shortage as the Strait of Hormuz remains closed. NATO Secretary General Mark Rutte said Friday that Iran’s behavior surrounding the Strait of Hormuz is a “direct assault” on freedom of navigation and global commerce. “Iran continues to attempt to hold the global economy hostage by closing the Strait of Hormuz. This direct assault on freedom of navigation and global commerce impacts us all,” Rutte said after a meeting of NATO foreign ministers in Helsingborg, Sweden.
Despite the tensions, US stocks rose on Friday. The S&P 500 (^GSPC) gained 0.4%, and the Dow Jones Industrial Average (^DJI) rose another 0.6% after reaching an all-time high on Thursday. The tech-heavy Nasdaq Composite (^IXIC) climbed 0.2%.