Since the outbreak of the Iran conflict nearly two weeks ago, fears of long-term supply disruptions have sent Brent and WTI prices soaring by over 40 percent. To cushion the turbulence in the oil market, the U.S. is now allowing countries to purchase Russian oil and petroleum products currently at sea for the next 30 days. Emril Jamil, an analyst at LSEG, stated that these are short-term fixes that fail to address the underlying supply issues. According to Yang An of Haitong Futures, the Strait of Hormuz remains the critical focal point. Shipping traffic there has effectively ground to a halt due to the conflict. Approximately one-fifth of the global oil supply flows through the narrow waterway between Iran and Oman.
Investors are also keeping a close eye on a raft of U.S. data due in the afternoon, including the PCE index, the Federal Reserve's preferred inflation gauge. Traders are hoping for clues regarding the central bank's future interest rate path. Speculation that rising oil prices could trigger a new wave of inflation has recently significantly dampened hopes for interest rate cuts.
Among the top gainers on the Dax were Zalando shares, which rose 1.4 percent after analysts at Bernstein upgraded the stock to "Market Perform" from "Underperform." On the losing side, Siemens Energy and Adidas were among the laggards, falling 3.3 and 2.6 percent, respectively.
(Reported by: Daniela Pegna, edited by Ralf Banser. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
