Iranian negotiators walked out of US peace talks on June 1, and markets responded the way markets always do when someone threatens to shut down one of the world’s most critical shipping lanes: with panic-buying of oil and a swift retreat from risk assets.
Brent crude futures surged nearly 7% intraday, closing near $95 per barrel. West Texas Intermediate did one better, climbing roughly 8% to approach $92 per barrel. The 10-year US Treasury yield ticked up 5 basis points to approximately 4.51% before pulling back slightly. Bitcoin, meanwhile, has been trading around $76,500, a level that reflects just how much digital assets have become entangled with geopolitical risk.
What happened with Iran
The catalyst was straightforward. Iranian negotiators halted talks with the US and renewed threats to re-block the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world’s oil supply passes daily. The move came in retaliation against Israeli military actions in Lebanon, adding yet another combustible ingredient to an already volatile situation in the Middle East.
President Trump publicly stated that negotiations were still technically ongoing. He then added that he was indifferent to whether they collapsed entirely.
