The Dow Jones Industrial Average had soared 1,389 points, or 3%, as of 9:38 a.m. ET, while the S&P 500 and Nasdaq futures jumped 2.5% and 3.2%, respectively. 

Brent crude oil prices dropped 16.6% to $91.09 a barrel – its lowest price in nearly a month after news that Iran would allow the temporary safe passage of ships through the strait, a vital maritime route for 20% of the world’s oil supply. 

US stock futures surged Wednesday morning as oil plunged near $90 a barrel. AFP via Getty Images

West Texas Intermediate crude also fell 5.6% to $70.94 a barrel.

In a Truth Social post Tuesday evening, less than two hours before Trump’s deadline for Iran to reopen the strait or face a bombardment of its power plants and bridges, the president announced a “double sided” two-week ceasefire.

“I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump wrote, adding that the ceasefire was subject to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”

“We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate,” he added.

Iran’s Supreme National Security Council said in a statement that it has agreed to reopen the strait for two weeks, though it emphasized it was not a full-fledged peace agreement. Israel also reportedly agreed to the ceasefire.

“Wall Street is exhaling as President Trump pressed pause on the destruction button, as there are enough signs that there’s a will to negotiate a deal, and that optimism is helping to end this stock market correction,” Robert Edwards, chief investment officer at Edwards Asset Management, said in a note Wednesday. 

“Even with this optimism, oil prices and stocks are still inversely correlated for the time being,” Edwards added. “It’s unclear how long these declines in oil will last, but it’s looking more likely that the spike in oil prices in recent weeks was indeed temporary.”

Trump wrote in a Wednesday morning Truth Social post that as part of the ceasefire, the US will work with Iran to “dig up and remove all of the deeply buried (B-2 Bombers) Nuclear ‘Dust’” – adding to market optimism. 

Traders are eager for the free flow of crude through the Persian Gulf to resume – but analysts have warned that oil prices could remain elevated, since it will take time and money to repair damages at Middle East energy facilities hit in air strikes.

Energy supply shocks tend to ripple through consumer prices, so there are concerns that stubbornly high oil costs could reheat inflation and keep interest rates high. 

Fed Chair Jerome Powell has said there is no need for an interest rate hike, and odds for an interest-rate cut jumped Wednesday morning following news of the ceasefire.

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Iran’s blockade of the Strait of Hormuz, a vital maritime route for 20% of the world’s oil supply, has caused the largest-ever energy supply disruption – sending Brent crude to $105 a barrel and West Texas Intermediate up to $96 as of Thursday.

As long as the supply shock is temporary, it likely won’t hurt growth or unemployment – but it will probably boost inflation even higher, according to economists surveyed by the Wall Street Journal this week.

Crude oil prices would need to jump to roughly $138 a barrel to put the US at a serious risk of a recession, according to a new survey of economists. Guerin Charles/ABACA/Shutterstock

Economists see a 32% chance of a recession in the next 12 months – up from 27% in January, according to the survey, which collected answers from 50 economists at Wall Street banks, universities and consulting firms.

As for how high crude oil would need to climb to push odds of a recession above 50%, economists’ answers averaged around $138 a barrel – though their responses ranged from $90 to $200, per the survey.

Oil prices would need to remain at that elevated level for about 14 weeks to raise recession odds above 50%, according to the experts. That’s the average length of time they cited, with the economists giving a wide range of answers — from four to 55 weeks.

Uncertainty about how long the Middle East conflict could last has muddled such projections, with critics saying the Trump administration has given mixed messages on the timeline — prompting pushback from the White House.

Robert Fry, chief economist at Robert Fry Economics, currently sees a 40% chance of a recession, with oil at $125 for eight weeks as the tipping point.

“My forecast is contingent on the assumption that the Strait of Hormuz will be fully open to tanker traffic by mid-April,” he told the Journal. 

“If it isn’t, oil prices will go much higher, and I will put a recession in my forecast.”

Brent crude soared to $105 a barrel and West Texas Intermediate is up to $96 as of Thursday. Christopher Sadowski for NY Post

Economists forecast gross domestic product adjusted for inflation will grow 2.1% in the fourth quarter and the unemployment rate will hit 4.5% in December – roughly the same as their estimates earlier this year.

But their outlook on inflation has soured as they expect the Consumer Price Index to hit 2.9% in December – after earlier this year forecasting a more modest 2.6%.

National average gasoline prices have skyrocketed to $3.88 a gallon amid the Strait of Hormuz crisis, according to AAA, almost certainly playing a role in inflation this year – but economists said they expect price pressures to be broader than just higher prices at the pump.

They expect the core reading of the personal consumption expenditures price index, which is the Fed’s preferred inflation figure and excludes volatile food and energy prices, to rise 2.8% in the fourth quarter compared to the previous year. That’s a jump from forecasts of 2.6% earlier this year.

Economists expect price pressures to be broader than just higher prices at gas pumps. AFP via Getty Images

Economists said they expect oil to settle at $86.70 a barrel by the end of June, and finish the year at roughly $73.54.

The Federal Reserve on Wednesday held interest rates steady in the 3.5% to 3.75% range, opting to stay in wait-and-see mode amid the war in Iran and conflicting economic signals.

Most policymakers kept their predictions for the year the same, with the closely-watched “dot plot” showing one rate cut this year and another in 2027.

Like the economists in the survey, the Fed’s forecasts for GDP and unemployment were also little changed, and they now expect higher inflation.

National average gasoline prices have skyrocketed to $3.88 a gallon amid the Strait of Hormuz crisis. MediaPunch / BACKGRID

Fed Chairman Jerome Powell – whose term ends in May – nodded to heightened uncertainty around the war in Iran, joking that if there was ever a meeting to skip economic projections, “this would be a good one, because we just don’t know.”

But he also nodded to the economy’s relative steadfastness in the face of severe shocks, saying it has done “pretty well through a lot of significant challenges” – adding that slow job growth is partially due to an immigration crackdown, while tariffs and the pandemic have hit inflation.

Economists in the Journal’s survey also acknowledged the economy’s ability to withstand recent shocks – but noted that there is no guarantee this resilience will continue.

“Given the ongoing war in the Middle East, surging oil prices, high tariffs, AI and the severe constraints on immigration, it is worthwhile noting how resilient the US economy has been so far,” Bernard Baumohl, chief global economist at the Economic Outlook Group, told the Journal. 

“But we must not take this resilience for granted.”

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Oil prices have been hovering around $100 a barrel in the futures markets since President Trump announced a massive attack on Kharg Island, a critical Iranian oil hub, where some 90% of its crude exports flow through.

Energy Secretary Wright told ABC News’ “This Week” on Sunday he expects oil prices to come down once the Iran war ends “in the next few weeks.” ABC News

An Iranian man speaks on his mobile phone as he stands on the debris in front of destroyed buildings following a military strike on the Iranian capital Tehran. AFP via Getty Images

“This conflict will come to an end in the next few weeks, and we’ll see a rebound in supplies and a pushing down of prices after that,” Wright told ABC News’ “This Week” on Sunday.

“We were very aware, very aware, that we would have [a] short-term disruption… [that] would cause a little bit of increased prices on Americans,” he added. “Prices today are still far below where they were in the Biden administration, where they were begging, bartering, and bribing Iran to behave better.”

Wright recalled how gasoline prices neared $5 a gallon at one point during the Biden administration, but was hopeful that there wouldn’t be a repeat of that this time. Gas prices are currently averaging $3.69 nationally, according to the latest data from the American Automobile Association. 

Some Iranian officials have warned that oil prices could broach $200 a barrel as the theocratic regime leverages its ability to wreak havoc in the critical chokepoint of the Strait of Hormuz, where about a fifth of the world’s seaborne oil traverses annually.  

“I would pay no attention to what Iran says,” he told NBC’s “Meet the Press” Sunday when asked about the risks of oil prices broaching $200 a barrel.

Follow The Post’s coverage of the United States’ airstrikes on Iran:

“There is a lot of energy that flows through the Strait of Hormuz. And depending upon the timing and the manner in which this conflict comes to an end, we’re going to see some elevated pricing until we get there,” Wright acknowledged. “We have done many, many actions to mitigate that price rise.”

Last week, the International Energy Agency (IEA) announced that its member countries were going to release some 400 million barrels of oil.

The Trump administration announced that it plans to unleash 172 million barrels from America’s oil reserves, which would bring the emergency supply down to its lowest level since 1982. 

People gather outside a damaged building following an Iranian projectile strike in central Israel. REUTERS

Israeli security forces and first responders inspect a building hit by an Iranian projectile strike at a residential neighborhood in Bnei-Brak, on the eastern outskirts of Tel Aviv. AFP via Getty Images

Still, Wright acknowledged that the Strait is not safe to traverse at the moment. 

“That’s one of the objectives at the end of this conflict is to reopen the Strait of Hormuz,” he added. “Since the conflict began, Iran has impeded flow through the Strait of Hormuz. And that is still the case today. We have focused initially on their ability to project distant power. Impeding flows in the Strait of Hormuz, which is right next to Iran.”

“That’s going to be an increasing focus of our military going forward.”

Trump said Saturday that allied countries will be dispatching ships to the Strait to make the critical oil chokepoint “open and safe.” Top administration officials have long contended that they expected that Iran would try to thwart travel through Strait if the US took military action against the regime. 

Before the war began, the price of gasoline nationally was below $3 a gallon. Wright was optimistic it could get back down to that level by the summer. 

“There’s a very good chance that’ll be true,” he said, when asked. “There’s no guarantees in war. The timeframe’s still not entirely clear. But I think that’s certainly a goal of the administration and very possible.”

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World leaders raced on Wednesday to shore up the global oil supply as the war in the Middle East and retaliatory attacks by Iran threatened to choke off the Strait of Hormuz, a vital passage for oil tankers. The threat was punctuated when three ships in or near the strait were damaged by strikes.

Hours later, the International Energy Agency said that its 32-member countries — which include Britain, Germany, Japan and the United States — would release 400 million barrels of oil from their strategic reserves, the most ever and the first such coordinated action since 2022, after Russia launched its full-scale invasion of Ukraine.

Fatih Birol, the agency’s executive director, did not say when the countries would begin releasing the oil, which would be enough to meet about four days’ worth of global demand. The coordinated effort came as high oil prices have driven up costs for consumers, with gas prices in the United States rising for the 11th straight day on Wednesday to a national average of $3.58 a gallon.

“This is a major action aiming to alleviate the immediate impacts of the disruption in markets,” Mr. Birol said in Paris, where the International Energy Agency, which was created in 1974 to help prevent price shocks, is based. “But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.”

On Wednesday evening, the U.S. Energy Department said the United States planned to release 172 million barrels of oil from its strategic reserves over the course of four months, beginning next week, as part of the coordinated effort.

The moves came as Israel and the United States launched more attacks against Iran and the Israeli military said on Wednesday evening that it had begun a “wave of extensive strikes” against what it described as Hezbollah infrastructure in the southern outskirts of Beirut, the Lebanese capital.

Explosions echoed across the city as night fell, rattling windows and sending thick plumes of acrid smoke rising over the capital.

Earlier, residents of central Beirut’s densely populated Aisha Bakkar district awoke to explosions after Israeli strikes hit an apartment building in the area. At least four people were wounded, the Lebanese health ministry said. Parts of the multistory building were blasted apart, sending debris, twisted rebar and rubble crashing onto cars in the street.

“I woke up and found myself on the floor,” said Ahmad Ballout, 67, an English teacher who lives in an apartment building facing the one that was struck. “We didn’t expect this at all.”

In Iran, crowds of people thronged the streets of Tehran on Wednesday to mourn military commanders killed by U.S. and Israeli strikes. As coffins were driven through the streets on flatbed trailers, state media showed thousands of men and women waving flags of the Islamic republic, slapping their chests with their hands and chanting slogans of devotion to Iran’s clerical leadership, and “Death to Israel.”

In interviews, some Iranians, however, described feelings of anxiety and despair because of the ongoing American and Israeli bombing campaign.

“Day by day, we have become more discouraged and hopeless,” said Iraj, 48, a resident of Tehran who asked to be identified by only his first name for fear of retaliation. “We only go outside when it’s absolutely necessary, mainly to get basic essentials or food, and even then only if we really have no other choice.”

Saeed, 38, another resident of Tehran, said that he had been staying awake at night, waiting for airstrikes to end.

“The war was supposed to focus on military sites, but we are seeing that residential areas around us have also been attacked,” he said, adding, “Our lives have been paralyzed, and work has completely stopped.”

President Trump, who has sent contradictory signals about the duration of the war on Iran, told Axios on Wednesday that it would end soon because there was “practically nothing left to target.” But Mr. Trump has also said only Tehran’s “unconditional surrender” would end the war, and Iran has shown no sign of halting its attacks.

U.S. and Israeli strikes have killed more than 1,300 people in Iran, according to Iranian officials, a toll that has undoubtedly climbed since the last figures were released days ago. Dozens of people — including seven U.S. service members — have been killed by Iran’s retaliatory strikes on neighboring countries. The Pentagon said on Tuesday that 140 U.S. service members had also been wounded, eight severely.

In Lebanon, officials said more than 630 people had been killed and over 800,000 had been displaced from their homes.

On Wednesday, the Israeli military said it had sent an additional infantry battalion to its border with Lebanon, as the Israeli military appeared poised to escalate its campaign against Hezbollah. Israeli forces have already been pushing deeper into Lebanon — expanding a de facto military buffer zone — since Hezbollah began attacking Israel last week.

As concerns rose about the safety of international shipping during a war that appeared to have no endgame, projectiles hit three vessels on Wednesday in or near the Strait of Hormuz, the narrow passage off Iran’s southern coast where one fifth of the world’s oil is transported, according to the United Kingdom Maritime Trade Operation.

A Japanese container ship owned by Mitsui, a large global shipping line, was among those hit, according to Kpler, a global ship tracking company. The two other ships, according to Kpler, were bulk carriers, which are designed to transport cargo like cars, grain and iron ore.

“This increasingly points to a sustained pattern rather than isolated incidents,” said Dimitris Ampatzidis, a senior risk and compliance analyst at Kpler. “The pace of attacks does not suggest any intention to de-escalate.”

Iran appeared to take responsibility for at least one of the attacks, on the Mayuree Naree, a Thai-flagged bulk carrier. Oman’s Navy rescued 20 of the ship’s 23 crew members after a fire broke out in the vessel’s engine room, and efforts were underway to rescue the remaining three, the Thai Foreign Ministry said.

A photo released by the Royal Thai Navy showed orange flames and gray smoke billowing from the ship. All crew members on the other two ships were safe and accounted for, the British maritime organization said. No information on any injuries was immediately available.

Alireza Tangsiri, the Iranian commander of the navy of the Islamic Revolutionary Guards Corps, said in a social media post that “any vessel that intends to pass must obtain permission” from Iran.

He issued the warning a day after the U.S. military said that it had attacked 16 Iranian mine-laying vessels in or near the Strait of Hormuz, although it was unclear whether Iran has deployed mines.

U.S. officials have said they believed that Iran was preparing to mine the strait but had not actually begun, according to an American official. The preparatory efforts spooked the Trump administration, the official said, prompting the White House to order the attacks.

On Wednesday, the U.S. military signaled that it might be preparing attacks on Iranian commercial ports on the strait. In a statement, U.S. Central Command, which oversees American military operations in the Middle East, warned civilians to avoid those ports, saying they had been commandeered by the Iranian government and used “to conduct military operations that threaten international shipping.”

The leaders ⁠of the Group of 7 nations — the United States, Canada, Japan, Italy, Britain, Germany and France — agreed on Wednesday to explore the possibility of sending ships to escort commercial vessels in the region, according to France, which holds the group’s presidency.

The attacks on ships have given Iran some economic leverage in the war, analysts say, allowing it to block a significant amount of oil and natural gas from world markets.

At least 13 ships in the strait, the Persian Gulf and the Gulf of Oman have been struck by projectiles since Feb. 28, when the United States and Israel began bombing Iran, prompting Iran to fire missiles and drones at Israel and its Arab neighbors.

On Wednesday, the United Nations Security Council voted 13-0 in favor of a resolution condemning Iran’s retaliatory strikes on other countries. The resolution, presented by Bahrain, was supported by 135 countries, Bahrain’s representative to the United Nations said. China and Russia, which have backed Iran for many years, abstained.

Pentagon officials told lawmakers in a closed-door briefing in Washington on Tuesday that they had estimated that the war on Iran had cost the United States more than $11.3 billion in the first six days alone, according to three people familiar with the briefing. The estimate did not include the military buildup ahead of the first strikes.

Reporting was contributed by Aaron Boxerman, Vivian Nereim, Yeganeh Torbati, Leily Nikounazar, Sarah Chaayto, Euan Ward, John Ismay, Johnatan Reiss, Sanam Mahoozi, John Yoon, Rawan Sheikh Ahmad, Eshe Nelson, Peter Eavis, Sui-Lee Wee and Chris Cameron.

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Fuel prices could soar, and stay elevated for months. That could make groceries and other shipped goods more expensive. And consumers and businesses, stung by the rising costs, could choose to spend less, constraining economic growth.

In the eyes of economists, that is the increasingly real and dire picture from the U.S.-led war with Iran, now in its second week. It may be a conflict of President Trump’s making, but it is becoming the world’s latest economic headache, one that has sent foreign leaders scrambling for ways to contain the possible fallout.

At the heart of the panic was a surge in the price of oil, which at one point on Monday shot above $100 a barrel. Because energy is central to the functioning of the global economy, the turbulence prompted heightened fears about a prolonged conflict that could exact a deep financial toll around the world, including on Americans.

In response, world leaders convened an emergency meeting on Monday of the Group of 7 countries, where finance ministers considered, yet decided against, tapping their national stores of oil to increase available supply. It was only after Mr. Trump asserted later in the day that the war was nearing its conclusion that oil prices began to calm down again, falling to around $85 a barrel.

“I knew oil prices would go up if I did this,” Mr. Trump told a news conference in Florida. “They’ve gone up probably less than I thought they’d go up.”

That fit a pattern for Mr. Trump, who has frequently brushed aside any economic blowback posed by his policy choices, including his military strikes on Iran. Previously, Mr. Trump has even described the sharp turn in gasoline prices as a “very small price to pay” for national security. The comments have offered a stark contrast with the president’s boasts about falling gas prices earlier in his second term, a development that he frequently portrayed as a strong gauge of the nation’s trajectory.

But the impact seemed anything but small for Americans. The average price of a gallon of gasoline reached nearly $3.48 nationally on Monday, according to AAA, a 16 percent increase from a week earlier. The surge in energy costs initially spooked financial markets, leading to sharp declines in the S&P 500 and other major stock indexes, which rebounded as the White House looked to tamp down concerns about the oil market.

“The White House is in constant coordination with the relevant agencies on this important issue, as it is a top priority to the president,” Taylor Rogers, a White House spokeswoman, said in a statement.

She described the surge in oil prices as a “short-term change,” adding that it would again “drop dramatically once the objectives of Operation Epic Fury are achieved.”

In many ways, the fallout around Iran has been similar to the global panic that greeted the start of Mr. Trump’s trade war nearly a year ago. Then, too, economists warned about looming upheaval, while world leaders panicked over the consequences for their economies. Some of the dire predictions came to pass, jolting consumers and businesses in ways still being felt today.

Yet Mr. Trump remained undeterred in both cases, forging ahead despite warnings that his strategy could inflict lasting economic damage, perhaps even touching off a global recession.

“This is a very concerning shock to consumers, which have been a driving force in the economy,” said Tim Mahedy, chief economist at Access/Macro, a research firm, who formerly worked at the Federal Reserve Bank of San Francisco.

He noted that consumer spending, which drives roughly 70 percent of U.S. economic growth, was the only sector that expanded throughout most of last year. Now, with Americans having run through their savings, Mr. Mahedy said, the energy shock is “really hitting at a bad time.”

“I am very concerned this could tip us into a recession if it persists,” he said.

Exactly how the war will ripple across the global economy may mostly depend on one factor — its duration. That’s because the conflict has obstructed shipping in the Persian Gulf, which has snarled much of the world’s oil and gas. The longer the slowdown, the worse the toll will be, though the administration has signaled it believes shipments could restart soon.

“We’re not too long, I think, before you will see more regular resumption of ship traffic through the Strait of Hormuz,” said Chris Wright, the energy secretary, in an interview Sunday on CNN’s “State of the Union.”

If U.S. strikes on Iran conclude in a few weeks, most economists believe that the rise in gas prices and other disruptions may prove short-lived. But that doesn’t mean that the war will be painless, especially for Americans who are already suffering a real pinch at the pump.

“If $100-per-barrel oil is sustained, you’re going to see the impact most directly in less consumer spending,” said Bernard Yaros, the lead U.S. economist at Oxford Economics. He added that low-income consumers would shoulder the heaviest burden because energy accounts for so much of their monthly spending.

If hostilities continue for many months, however, the damage to the global economy could be more pronounced. Oil could stay above $100 per barrel in a worst-case scenario, carrying severe repercussions that would make goods more expensive and slow global growth, said Gregory Daco, the chief economist at EY-Parthenon.

A protracted conflict could cause inflation globally to rise about two percentage points faster than it would have otherwise, he estimated. In the United States, that means inflation could top 4 percent this year. The surge in prices would coincide with a slowdown that could tip off a recession and depress total U.S. output. The nation’s gross domestic product, a measure of that output, would grow only 1.6 percent in 2026, compared with the 2.4 percent originally projected, Mr. Daco found.

These new risks have surfaced at a vexing moment for the U.S. economy, which is still growing when prices are high and the labor market is showing new signs of weakness. The competing forces are the result of factors including the meteoric rise of artificial intelligence and Mr. Trump’s policies, including his steep tariffs and mass deportations.

“This administration is a sequence of supply shocks,” Mr. Mahedy said. “This is coming on top of two other very significant supply shocks, tariffs and immigration policy.”

Despite those warnings, the Trump administration has remained bullish about the pace of the war with Iran. Asked this weekend if he was concerned about the rise in gas prices, Mr. Trump told reporters: “No. This is a short excursion into something that should’ve been done for 47 years. No president had the guts to do it.”

But Mr. Trump has also not ruled out sending troops into the country, which would mark a dramatic escalation in the fighting. With an ever-shifting definition for what might render the operation a success, the president has taken some steps to insulate Americans from economic fallout.

Last week, the U.S. government said it would offer limited protection and insurance for tankers crossing the Persian Gulf. The Treasury Department began taking steps that could allow for sanctioned Russian oil to be sold to other countries, including India.

Lifting those sanctions, which were strengthened recently in response to Russia’s invasion of Ukraine, marked a dramatic turnabout for Mr. Trump, who had previously threatened withering tariffs against countries that purchased Russian energy. It was also an effort to bolster the oil supply, even as the president’s top aides insisted that they would not tap U.S. reserves to ease strains on the market.

“From my early briefings about what was going to happen, and how it was going to affect the economy, it’s going way faster, it’s been way more successful, than I expected just listening to the briefings,” said Kevin Hassett, the director of the White House National Economic Council, on CNBC last week.

“I think that, the bottom line is, there’s some disruption right now,” he said, “but at the White House we’ve got our eyes on the horizon.”

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Brent crude oil hit $86 a barrel, while West Texas Intermediate crude jumped above $90 – pushing national average gasoline prices to $3.32 a gallon on Friday, according to AAA.

The Dow Jones Industrial Average tumbled 562 points, or 1.2%, by Friday afternoon while the S&P 500 and Nasdaq fell 1.1% and 1%, respectively.

US oil prices surged to $90 a barrel on Friday after President Trump demanded unconditional surrender from Iran. REUTERS

Investors are fearful that an ongoing conflict could prolong Iran’s blockade of the Strait of Hormuz, a vital maritime route for 20% of the world’s oil supply – which economists have warned could slam gasoline prices and overall inflation.

“I don’t have any concern about it,” Trump told Reuters Thursday, when asked about higher prices at the pump. “They’ll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.”

Energy Secretary Chris Wright predicted Friday morning that gas prices will come down in a matter of “weeks, not months,” during an interview with “Fox & Friends.”

Qatar’s energy minister Saad al-Kaabi, meanwhile, said he expects all Gulf energy exporters to shut down “within days” – potentially pushing oil as high as $150 a barrel.

“This will bring down the economies of the world,” Kaabi told the Financial Times Friday. 

“If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”

Even if the war ended immediately, it would take Qatar “weeks to months” to return to a normal level of output after an Iranian drone strike forced it to close its largest liquified natural gas plant, the Ras Laffan, he said.

Qatar’s energy minister warned a lasting Iran conflict could “bring down the economies of the world.” AP

“Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” Kaabi said, referring to a legal clause used when a company cannot meet contractual obligations due to external circumstances.

“All exporters in the Gulf region will have to call force majeure. If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice.”

Though countries differ on their principal source of oil supply, the global market is ultimately integrated – so the supply disruption hitting China, Russia, India and other nations still has an impact on the US, according to Kenin Spivak, chief executive of SMI Group.

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As the Iran conflict disrupts oil supplies, the US on Thursday issued a 30-day waiver for India to buy Russian oil – a sharp reversal from its earlier stance, which saw it slap a 25% tariff on the nation as punishment for buying energy from Moscow.

The Trump administration revoked the tariff last month on the condition that India would buy less energy from Russia and more oil from the US. Since then, India has also been purchasing more supply from the Middle East.

“This deliberately short-term measure will not provide significant financial benefit to the Russian government as it only authorizes transactions involving oil already stranded at sea,” Treasury Secretary Scott Bessent said in a post on X Thursday. 

Investors are fearful that an ongoing conflict could prolong Iran’s blockade of the Strait of Hormuz. ABEDIN TAHERKENAREH/EPA/Shutterstock

Earlier in the week, Trump also offered political risk insurance for oil tankers in the Gulf – adding that the US Navy will escort vessels, if necessary.

“Further action to reduce pressure on oil is imminent and…in the long-term, the actions we’re taking will dramatically increase the stability of the region and oil prices,” Trump said Thursday.

A White House official told The Post that the US economy is strong enough to weather any temporary oil price shocks, nodding to recent inflation data.

Consumer inflation slowed to 2.4% in January, its tamest pace since last May – though wholesale inflation heated up to 2.9%, according to the most recently-available government data.

The US on Thursday issued a 30-day waiver for India to buy Russian oil. AFP via Getty Images

“Thanks to President Trump’s leadership in his first term and current term, the United States remains the largest crude oil and natural gas producer in the world,” White House press secretary Karoline Leavitt told The Post. 

“President Trump’s entire energy team, from the White House to the National Energy Dominance Council to Secretaries Wright and Bessent, have a game plan to keep oil prices stable throughout Operation Epic Fury,” Leavitt said.

Many shippers will likely continue avoiding the Strait of Hormuz despite the proposal for the US Navy to escort oil tankers, since it is unlikely to lead insurers to return coverage to pre-war levels of availability or cost, Spivak told The Post.

The biggest question on investors’ minds is how long the conflict will continue.

“If Trump pulls out within the next week or two, then we can snap back big time and see crude come flying back down,” Mahoney Asset Management CEO Ken Mahoney told The Post.

“The longer this goes on, and the longer crude stays elevated and moving up in price, the worse this may get. Oil is the ‘hot potato’ that gets passed along, fueling inflation,” he added.

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In India, the timing of the U.S. Supreme Court’s ruling against President Trump’s use of an emergency law to impose tariffs caused acute whiplash. The country had just escaped a 50 percent tariff with a trade deal announced not even three weeks ago.

One term of that deal has been making India’s prime minister, Narendra Modi, particularly uncomfortable.

India agreed to cease buying crude oil from Russia, as Mr. Trump had been demanding since August, when he doubled tariffs on most Indian goods to punish the country, he said, for obstructing his efforts to end the war in Ukraine. Since the deal was announced, Mr. Modi has been accused by his political opponents of bending India’s trade policies with third parties, in this case Russia, to appease the United States.

The ruling on Friday makes things even trickier for Mr. Modi.

On one hand, the stick Mr. Trump had used to get India to acquiesce was the International Emergency Economic Powers Act, the same law the Supreme Court declared he was using improperly.

The Trump administration characterized the Russian oil part of the deal as a quid pro quo. A White House document published on Feb. 9 said the punitive tariff was dropped “in recognition of India’s commitment to stop purchasing Russian Federation oil.”

Yet Indian buyers had been reducing their intake of seaborne crude from Russia for months, and increasing their relatively small import of American energy products. A move by the U.S. Treasury in October to penalize companies that did business with the two biggest Russian oil firms, Rosneft and Lukoil, also discouraged the trade.

India’s government has stayed cagey about the reason for that shift, to the point of barely acknowledging the role of the Trump-Modi agreement. It would be politically difficult, if not disastrous, to admit that the United States was forcibly changing India’s commercial relationship with Russia, an old economic and defense partner. All India has said is that its decisions were guided by “national interests.”

On Feb. 12, Randhir Jaiswal, the spokesman for India’s foreign ministry, said carefully that the document was “consistent” with what the two countries had agreed. Asked the same thing on Friday, Mr. Jaiswal said at a news briefing “to look at what we said in the last few weeks.”

Russia hasn’t done anything to ease India’s predicament. “We have no reason to believe that India has changed its position on buying Russian hydrocarbons, from what it was before the tariffs,” a spokeswoman for Russia’s foreign ministry said on Feb. 18.

Other provisions of the trade deal have caused trouble for Mr. Modi.

While India won immediate relief from the 50 percent tariff, Mr. Modi promised to open some of its most coveted agricultural markets — drawing immediate condemnation from India’s farmers. He also pledged to spend $500 billion on American goods over five years, in effect doubling India’s imports from the United States, and “to strengthen economic security alignment” between the two countries, in ways that have yet to be spelled out. Mr. Modi’s critics called it capitulation.

With the Trump administration’s ability to impose such sweeping tariffs now in doubt, India’s main opposition party on Saturday called for the entire deal to be put on hold.

At the same time, both countries have interests in working together.

On Friday, hours before the Supreme Court’s ruling, the new American ambassador to India, Sergio Gor, welcomed India’s entry into a Trump administration program called Pax Silica. The effort, now including 11 other countries, aims to build high-tech supply chains, from critical minerals to cutting-edge microchips, that do not depend on China.

Joint maneuvers against China can be made politically palatable in India, which fought a bloody skirmish along their border less than five years ago. Taking direction from Washington on Russian oil, however, is touchier. Muyu Xu of Kpler, a shipping-data firm headquartered in Brussels, estimated that India was still importing a million barrels a day in February.

Ms. Xu, in an email, wrote that Kpler’s analysis shows that Indian refiners will continue buying more oil from sources other than Russia this month, adding that it would take another month to see whether India was cutting off the flow of Russian crude.

It is unclear if any such near-term plans will be affected by the Supreme Court’s ruling. Like other world leaders that made compromises with Mr. Trump, Mr. Modi presented the trade deal to the Indian public as a win-win. Jerking around policy now, in accordance with a foreign court’s decision, would open him up to fresh criticism from his political opposition.

Mr. Gor, in a speech announcing India’s entry to the Pax Silica initiative, indicated that some American officials were eager to get the United States back on the track of its longer-term objectives in India. He compared India’s ancient defeat of Alexander the Great’s army to the fledgling American colonies’ defeat of Britain in the Revolutionary War. Today, he was saying, both countries share an abiding interest in containing China’s growing power.

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OPEC+ has reversed its strategy of output cuts from April and has already raised quotas by more than 2.5 million barrels per day, representing about 2.4% of world demand, to boost market share and after coming under pressure from President Trump to lower oil prices.

Eight OPEC+ countries will hold an online meeting on Oct. 5 to decide on November output. OPEC+ pumps about half of the world’s oil and includes the Organization of the Petroleum Exporting Countries plus Russia and other allies.

OPEC+ will likely approve another oil production increase of at least 137,000 barrels per day at its meeting next week. REUTERS

OPEC headquarters and authorities in Saudi Arabia did not immediately respond to requests for comment.

Oil prices have fallen from over $80 per barrel at the start of the year but have mostly traded in a narrow range of $60-$70 per barrel since OPEC began production increases in April.

On Friday, prices rose to their highest since Aug. 1, hitting levels above $70 per barrel, supported by Ukrainian drone attacks on Russia’s energy infrastructure which disrupted refining and shipments from one of the world’s biggest oil exporters.

Oil prices rose Friday to their highest since Aug. 1, hitting above $70 per barrel, REUTERS

This aerial view shows the oil tankers Tataki (Liberia-flagged) and Maran Aspasia (Greece-flagged) filling while docked at Al-Basrah Oil Terminal (ABOT), about 50 kilometres in the Gulf waters offshore of Iraq’s southern Faw peninsula, on August 5, 2025. AFP via Getty Images

The group’s total output reductions amounted at their peak to 5.85 million bpd, made up of three different elements – voluntary cuts of 2.2 million bpd, plus 1.65 million bpd by eight members, and another 2 million bpd by the whole group.

The eight producers plan to fully unwind one element of those cuts — 2.2 million bpd — by the end of September. For October, they started removing a second layer, of 1.65 million bpd, with an increase of 137,000 bpd.

OPEC+ also gave the United Arab Emirates approval to boost production by 300,000 bpd between April and September.

The November increase to be discussed on Oct. 5 will amount to at least 137,000 bpd, equal to the October hike, the three sources said. A final decision has not been made, the sources said.

OPEC+ hikes have fallen short of the pledged amounts because most members are pumping at capacity, analysts have said.

OPEC+’s third group-wide layer of cuts of 2 million bpd is due to last until the end of 2026.

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OPEC+ has been increasing production since April after years of cuts to support the oil market, but the Sunday decision to further boost output came as a surprise amid a likely looming oil glut in the northern hemisphere winter months.

Eight members of OPEC+ agreed in an online meeting on Sunday to raise production from October by 137,000 barrels per day, it said in a statement, much lower than the monthly increases of about 555,000 bpd for September and August and 411,000 bpd in July and June.

OPEC+ members voted to raise oil production by 137,000 barrels per day beginning next month. AP

The Sunday deal also means OPEC+ has begun to unwind a second tranche of cuts of about 1.65 million bpd by eight members more than a year ahead of schedule. The group has already fully unwound the first tranche of 2.5 million bpd since April, equivalent to about 2.4% of global demand.

“The barrels may be small, but the message is big,” said Jorge Leon, analyst at Rystad and a former OPEC official. “The increase is less about volumes and more about signaling – OPEC+ is prioritizing market share even if it risks softer prices.”

OPEC+, made up of the Organization of the Petroleum Exporting Countries plus Russia and other allies, found it easy to raise production when demand was growing in summer, but the real test will come in the fourth quarter with expected slowing demand, Leon said.

OPEC+ said it retained options to accelerate, pause or reverse hikes at future meetings. It scheduled the next meeting of the eight countries for Oct. 5.

OPEC’s output increases this year have come as leader Saudi Arabia has sought to punish other members for overproduction. Kommersant

OPEC’s output increases this year also come as Saudi Arabia has sought to punish other members such as Kazakhstan for overproducing, and as the United Arab Emirates has built new capacity and sought higher targets.

Earlier this year, President Trump put pressure on the group to boost output as he sought to fulfill his election promise to bring down domestic gasoline prices.

Oil prices have been at around $65 a barrel, bolstered by Western sanctions on Russia and Iran. EPA

The increases in output have led to a fall in oil prices of around 15% so far this year, pushing oil companies’ profits to their lowest since the pandemic and triggering tens of thousands of job cuts.

Oil prices have not collapsed, however, trading at around $65 a barrel, supported by Western sanctions on Russia and Iran. That has emboldened OPEC+ to continue increasing output.

OPEC+’s hikes have fallen short of the pledged amounts because most members are pumping near capacity.

As a result, only Saudi Arabia and the United Arab Emirates are able to add more barrels into the market, analysts have said and data have shown.

OPEC+ had two layers of cuts before the Sunday deal — the 1.65 million bpd cut by the eight members, and another 2 million bpd cut by the whole group in place until the end of 2026.

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