At the G7 summit in France, President Donald Trump publicly acknowledged that continuing the war with Iran could have triggered an economic catastrophe, and that fear was a major reason he pushed for a deal. He said, “I did not want to see an economic catastrophe,” while defending the memorandum of understanding signed with Iran this week. Trump also said that whenever peace became more likely, the stock market “jumped like a rocket,” and when the messaging turned negative, it fell sharply.
The article says the White House had tried to downplay those pressures, but the agreement was not driven only by security or diplomacy. It also reflected concern that an energy shock could spin out of control. The immediate outcome, according to the report, was reopening of the Strait of Hormuz after the U.S. and Iran signed the understanding. CNN warned, however, that the move may have come too late.
Almost four months of disrupted exports from the Middle East left global oil supply badly strained. According to Kpler, the war erased 1.15 billion barrels of oil from the world market. Strategic stockpiles in International Energy Agency member states are at their lowest level since 1990, the U.S. emergency reserve is at a 43-year low, and commercial inventories have fallen to what the industry calls operational pressure.
Brent crude had surged to $126.41 a barrel at the height of the fighting, then fell after the mid-April ceasefire and recently traded below $80. Some analysts say that drop is too steep because it is based on optimism, not on physical oil returning to the market. Global inventories have already fallen by 190 million barrels, and even if production rises almost 5 million barrels a day above demand, CNN said it would take about a year to rebuild what was lost.
Experts cited by CNN said restoring normal flows through Hormuz will take months because mines must be cleared, tankers returned, and supply chains restarted. RBC Capital Markets’ Helima Croft said, “Everyone says: ‘It’s over!’ but there is a very big logistical challenge on the way back.” Kpler’s Matt Smith said U.S. consumers could still face higher summer prices, while Macquarie’s Vikas Dwivedi said the world had used up its “big cushion” of spare oil, though he argued fears of a price spike may be overstated.
