US Strikes Iranian Nuclear Sites Raise Global Oil Market Tensions

The recent U.S. military strikes on Iranian nuclear sites, dubbed "Operation Midnight Hammer," have escalated tensions, raising fears of a broader conflict and potential Iranian retaliation through sabotage, asymmetric warfare, and proxy attacks. Iran's parliament voted to close the Strait of Hormuz, a crucial global oil shipping route, which could disrupt $1 billion in daily shipments and impact oil prices, though experts like Richard Redoglia believe a full closure is unlikely due to the economic damage it would inflict on Iran itself. Equity markets have shown cautious calm amid these developments, with investors awaiting clear signs of Iran's response before making significant moves, especially given concerns about oil price volatility affecting global inflation and deal activity. Jeremy Siegel of Wharton highlights that both potential positives and negatives for markets have increased following the strikes. Iranian officials condemned the U.S. actions as a betrayal of ongoing diplomatic efforts, emphasizing that retaliation is certain and might target U.S. assets or escalate regional tensions, though decisions like closing the Strait rest with Iran's National Security Council due to the risks involved. Overall, the situation remains volatile with significant implications for global security, energy markets, and geopolitical stability.