US President Donald Trump is set to address the United Nations General Assembly on Tuesday as his war with Iran approaches the seven-month mark, putting Iran war’s impact on oil prices, shipping routes and global markets firmly in focus.
With Brent crude hovering around $100 a barrel and the Strait of Hormuz still facing disruption, investors will be watching Trump’s comments for any indication of a shift towards diplomacy.
The Iran war has disrupted energy flows across the Middle East, with the Strait of Hormuz remaining a key concern for global oil markets. Although shipments through the waterway have improved, flows remain below pre-war levels.
Brent crude settled at $100.34 a barrel on Monday before rising above $102 in early Tuesday trading as markets weighed the prospect of US-Iran talks.
Trump has said the military campaign is aimed at addressing Iran’s nuclear threat. His administration has also maintained pressure on Tehran through military action, sanctions and restrictions on Iranian oil.
The market reaction has increasingly hinged on whether the conflict moves towards negotiations. Iran and the US have exchanged signals about possible diplomacy, with Trump saying he would be open to meeting Iranian President Masoud Pezeshkian in New York.
The is central to the market outlook because of its role in transporting oil and gas from Gulf producers. Improved traffic in recent days has eased some supply concerns, but any renewed disruption could quickly put upward pressure on crude prices.
Saudi Arabia has also been working to restore alternative export routes after attacks disrupted its East-West pipeline. Reuters reported that the kingdom was seeing a partial recovery in shipments, another factor being monitored by oil traders.
The prospect of greater supplies and diplomatic progress has already affected prices. On Monday, Brent fell 3.4% to $100.34 a barrel as traders assessed the possibility of progress at the UN General Assembly.
and other mediators seek to bridge what Qatari Foreign Ministry spokesperson Majed al-Ansari described as a “deep deficit of trust” between Washington and Tehran.
“This will end at the negotiating table,” al-Ansari said. “Either we sign a deal now or sign a deal 10 months away. The only difference is the number of dead and destruction that we see.”
Secretary of State Marco Rubio has also said Trump is open to meeting Pezeshkian while both leaders are in New York.
“This is a president that will meet with anybody for the most part, because he believes that engaging with people is important if you’re going to solve problems,” Rubio said on NBC’s “Today” show. “It doesn’t mean you’re going to end up agreeing with them, but it’s important.”
Any movement towards negotiations could influence expectations for oil supply through the . Conversely, a renewed escalation would keep geopolitical risk elevated and could add to volatility in crude markets.
Beyond Iran, from Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates to discuss the war and recent Iran-backed attacks on Saudi Arabia.
He is also scheduled to meet British Prime Minister Andy Burnham, Japanese Prime Minister Sanae Takaichi and Venezuela’s acting President Delcy Rodríguez.
Ukraine will also feature in Trump’s diplomatic schedule, with a meeting planned with Ukrainian President Volodymyr Zelensky as the Russia-Ukraine war continues.
The US president is also expected to participate in discussions surrounding a new agreement with Denmark and Greenland that would expand the US military presence in Greenland while keeping the territory under Danish control.
For investors, the key signals from are likely to centre on Iran, the Strait of Hormuz and the possibility of negotiations. Oil prices have already shown sensitivity to signs of improving supply and potential US-Iran diplomacy.
With Brent still around the $100 mark, developments at the UN this week could provide the next major signal for energy markets already adjusting to months of disruption from the Iran conflict.
