Daijiworld Media Network- Washington

Washington, Jun 18: Global oil markets witnessed heightened volatility this week following stern remarks by US President Donald Trump, who escalated his rhetoric against Iran amid the continuing military exchanges between Tehran and Tel Aviv. Crude prices spiked sharply on Tuesday, rising over 4%, before stabilising midweek, with markets assessing the potential fallout from deepening tensions in West Asia.

The surge in prices came as President Trump, fresh from his early departure from the G7 Summit in Canada, made a string of provocative statements on his social media platform, Truth Social. He demanded Iran’s “unconditional surrender” and hinted at military support for Israel, specifically alluding to strikes on Iranian nuclear and military facilities. “We know exactly where the so-called 'Supreme Leader' is hiding... an easy target, but safe for now,” he wrote in a post that raised international eyebrows and market concerns.

These developments rattled global energy traders, especially given the threat to the Strait of Hormuz, a strategic chokepoint through which nearly 20% of the world's oil is transported. Analysts cautioned that a single miscalculated move — especially a strike on Iran’s Fordow nuclear facility — could trigger widespread chaos. “If Fordow gets hit, expect the Strait of Hormuz to become a maritime minefield, Houthi drones to target Red Sea lanes, and militia groups across the region to engage US forces,” warned Stephen Innes of SPI Asset Management.

Although oil prices pulled back slightly on Wednesday, volatility remains the theme. The uncertainty bled into equity markets, particularly in Asia. Markets in Hong Kong, Shanghai, Singapore, Sydney, Manila, and Jakarta closed in the red, reflecting widespread investor unease. However, modest gains were recorded in Tokyo, Seoul, and Taipei, offering a mixed picture across the continent.

Adding to the market's anxiety were weak economic signals from the US. Retail sales and factory output figures for May came in below expectations, casting doubts on the strength of the American economic recovery. Wall Street’s subdued performance further dragged sentiment in global bourses.

Speculation now mounts over potential interest rate moves by the US Federal Reserve. While the central bank is expected to maintain rates in its upcoming policy announcement, analysts believe softening data and geopolitical instability could push the Fed toward easing later this year. “If not for the unpredictable nature of Middle East tensions and trade uncertainties, the Fed would probably have begun cutting already,” opined KPMG senior economist Benjamin Shoesmith.

With the world watching closely, markets are likely to continue their roller-coaster ride — tightly linked to both missile trajectories and policy pronouncements.