By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. June 19, 2025. Article no 1571.
Today oil prices rose amid ongoing geopolitical tensions in the Middle East, particularly between Iran and Israel, which have raised concerns about potential supply disruptions.
Oil prices surged by approximately 11% amid escalating conflict between Iran and Israel, driven by fears of supply disruptions and broader geopolitical risks in the Middle East. This sharp rise reflects heightened concerns about potential interruptions to oil production and transport, particularly around critical areas like the Strait of Hormuz, a key passage for global oil shipments
This increase in oil prices occurred despite the U.S. stock and bond markets being closed for the Juneteenth holiday.
Traders have shifted their exposure toward major U.S. energy companies such as ExxonMobil and Chevron, as well as the energy sector ETF XLE. These investments are seen as ways to gain exposure to geopolitical risk premiums embedded in oil prices, as these companies are positioned to benefit from higher energy prices amid supply uncertainties.
However, futures trading continued, and U.S. stock index futures fell, with contracts tied to the S&P 500 and Dow declining by about 0.4% and Nasdaq-100 futures dropping 0.6%. The Federal Reserve’s reluctance to cut interest rates also weighed on market sentiment, contributing to the decline in stock futures during this holiday-thinned trading session.
The FTSE 100 (^FTSE) and European stocks slipped on Thursday as traders weighed up the latest decision on UK interest rates from the Bank of England (BoE), as the escalating conflict in the Middle East.
Threadneedle Street left rates on hold at 4.25% after UK inflation fell last month from 3.5% to 3.4%, holding above the BoE’s 2% target. Inflation could also rise further if the Israel-Iran conflict drives up oil prices.
Talks between Iran, the UK, France, Germany and European Union (EU) are set to happen in Switzerland on Friday in consultation with the Trump administration, according to a Western diplomat.
The Israel-Iran conflict is currently causing oil prices to rise sharply while putting downward pressure on U.S. stocks, reflecting investor concerns about geopolitical risks and their potential impact on energy supplies and inflation.
U.S. President Trump is seriously considering various options regarding the escalating conflict between Israel and Iran, including the possibility of a U.S. military strike against Iran’s nuclear facilities.
On Tuesday, June 17, U.S. stock markets had slipped while oil prices were rising amid escalating tensions between Israel and Iran. The S&P 500 index fell about 0.8%, dropping approximately 50 points to 5982.73, reflecting investor caution as the conflict intensified.
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© Copyright 2025 – Eurasia Business News. Article no. 1571.
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