Oil prices surged and gold touched its highest level in two months on Monday after US President Donald Trump introduced a new demand into the already fraught negotiations over ending the conflict with Iran: compensation for American losses.
The intervention came after Tehran insisted that any deal to reopen the Strait of Hormuz, the narrow waterway between Iran and Oman through which about a fifth of the world's oil and liquefied natural gas passed before the war, must include US payments for damage caused by military strikes. Trump responded in kind on his Truth Social platform, according to Reuters, which reported on the exchange.
“"I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts, for which they are famous."”
A new sticking point in an already stalled negotiation
The strait has been effectively shut since the United States and Israel launched strikes on Iranian territory on 28 February, a blockade that has pushed up energy prices and stoked inflation worries worldwide. Brent crude jumped as much as 4.25% on Monday to trade above $87 a barrel, extending a rally of more than 5% over the previous three trading sessions, according to Reuters and market data cited by the Jefferson City News-Tribune.
Analysts said the reparations dispute makes a near-term deal on Hormuz less likely, not more. One regional security analyst suggested, in comments carried by InvestingLive, that Iran may be leaning on demands like reparations partly as leverage to secure more realistic concessions such as sanctions relief.
Gold, often bought by investors as a hedge in times of uncertainty, held near a two-month high, a move traders linked both to the Iran standoff and to shifting expectations for US Federal Reserve policy following a softer than expected jobs report. Markets have since raised the odds of a Fed interest rate increase as September approaches, reflecting concern that costlier oil could feed through into broader inflation.
A profit warning closer to home
Away from the Middle East, British housebuilder Bellway added a note of caution to European markets. The company, one of the UK's largest developers, said it now expects underlying operating profit of around £320m for the year to the end of July, at the bottom end of its previous guidance range of £320m to £330m, though still ahead of last year's £303.5m.
Housing completions rose 11% to 9,695 homes, beating the company's own guidance, and revenue increased more than 13% to £3.14bn, according to Investing.com. But shares fell around 1% as investors focused on the company's warning that conditions beyond the current financial year remain unpredictable.
Bellway chief executive Jason Honeyman linked the caution to wider economic pressures, including mortgage rate volatility and renewed inflation in building costs, and used the results to press UK policymakers on housing supply.
“"With the near-term outlook remaining uncertain, we call on the Government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most."”
For European readers, the two stories underline a common thread: energy costs tied to the unresolved US-Iran conflict are feeding into borrowing costs and consumer confidence across the continent, from fuel bills to mortgage affordability. Diesel futures in Europe also surged more than 10% after refineries in Saudi Arabia and Russia came under attack, a development that further tightened supply of the fuel widely used in European transport and industry, according to reporting picked up by the News-Tribune.
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