US Federal Reserve policymakers are expected to leave interest rates unchanged at their meeting next week, as the US-Israel war on Iran sends shock waves through markets and recent economic data has begun to show weakness.

The Fed will start its two-day meeting on Tuesday, with an announcement of the benchmark lending rate in the world's largest economy a day later.

The central bank cut rates three consecutive times last year before holding them steady at its January meeting.

It has a dual mandate of holding inflation near a long-term target of two percent while ensuring maximum employment.

With war in the Middle East causing global oil prices to spike, potentially increasing overall inflation and curbing growth, analysts say policymakers are unlikely to make any moves now.

"This is certainly a bind for the Fed, because supply shocks are extremely hard to deal with in that they lift inflation and they curb output," EY-Parthenon chief economist Gregory Daco told AFP.

Affordability is a key political issue for President Donald Trump, who has claimed that prices are cooling even as consumers complain of the high costs of basic goods.

Trump has repeatedly insulted Fed Chair Jerome Powell as he demands lower rates, and the Justice Department threatened Powell with a criminal indictment as part of an investigation into cost overruns for a Fed renovation project.

While consumer inflation has dropped from a peak of 9.1 percent during the Covid pandemic, it remains well above the Fed's two- percent target.

"Unlike other countries, which have already achieved some level of price stability, we're five years in without price stability," said Diane Swonk, chief economist at KPMG.

She warned that, depending on how long the Iran war lasts, inflation could again soar past four percent.

"I think the main story here is that we are seeing inflation moving away from the Fed's two-percent target, and that will lead many Fed policymakers to adopt an even more hawkish stance," said Daco.

Raising rates to cool the economy, however, could bring the Fed into tension with its other mandate: managing unemployment.

The United States unexpectedly lost 92,000 jobs in February, government data showed, while the unemployment rate rose to 4.4 percent.

Analysts say a relatively steady unemployment rate has been masking churn beneath the surface.

Labor demand has been dropping, but unemployment has not spiked because that has been accompanied by a drop in supply due to Trump's immigration crackdown.

Daco said labor demand gauges were showing signs of concern, including a weak hiring rate "at a decade low," slowing wage growth and business leaders talking about labor replacement due to AI.

Swonk noted that spiking uncertainty due to war in Iran and its knock-on effects would further curb labor demand.

"Uncertainty acts as its own tax on the economy, and one of the first lines of defense that firms do is they freeze hiring," she said.

And recent data ahead of the Fed meeting is not encouraging, with US GDP growth revised sharply lower in the final months of 2025.

Some Fed policymakers, however, have been cautious in describing the possible inflationary shocks of the war.

Fed Governor Christopher Waller expressed sympathy on Bloomberg TV last week for consumers facing spiking gasoline prices.

"But for us thinking about policy going forward, this is unlikely to cause sustained inflation," he said.

Swonk warned, however, that any economic slowdown from the war could be tough to recover from in the immediate term.

"I think people are discounting the risk of the lingering effects," she said, noting that supply disruptions affect more than oil prices.

"There's no question they're between a rock and a hard spot, and it just got harder," Swonk said of policymakers having to balance inflation and unemployment.

To Daco, however, uncertainty means the Fed is more likely to hold rates steady "for a long period of time."

Traders have begun to reduce their outlook for rate cuts, and Swonk said that hikes could even be on the menu.

"This is not a one-way street. We're at a busy intersection, and the stoplight's broken," she said.

Oil loading operations ‌at the United Arab Emirates' Fujairah emirate, a major bunkering hub ​and crude export terminal, have ​resumed following a drone attack ⁠and fire on Saturday, ​a Fujairah-based industry source told Reuters.

Fujairah, ​outside the Strait of Hormuz, is the outlet for about 1 million barrels ​per day of the ​UAE's Murban crude oil - a volume equal ‌to ⁠about 1% of world demand.

Abu Dhabi state oil giant ADNOC, which operates in the emirate, ​did ​not immediately ⁠respond to a request for comment.

Bloomberg News ​earlier reported the resumption ​of ⁠oil loading operations in the emirate.

Oil prices could extend gains at Monday's open as the US-Israeli war against Iran entered a third week, putting oil infrastructure at risk and keeping the Strait of Hormuz shut in the world's largest supply disruption.

US President Donald Trump threatened further ​strikes on Iran's Kharg Island oil export hub, drawing a defiant response of further retaliation ​from Tehran.

Brent and US West Texas Intermediate crude futures have already spiked sharply and ⁠rattled global financial markets. Both contracts have surged more than 40% so far this month to their ​highest levels since 2022 after the US-Israeli attacks on Iran prompted Tehran to halt shipping through the Strait ​of Hormuz - a key chokepoint for a fifth of global oil supply.

Trump has urged China, France, Japan, South Korea, Britain and others to deploy warships to secure the strategic gateway.

The United States struck military targets on Kharg Island on Saturday, which was swiftly ​followed by Iranian drone attacks on a key oil terminal in the United Arab Emirates.

"This marks an escalation ​in the conflict," JP Morgan analysts led by Natasha Kaneva said.

"Until now, the region's oil infrastructure has largely been spared."

Besides ‌UAE's ⁠Fujairah, Saudi Arabia's Ras Tanura export terminal and Abqaiq oil processing facilities have been listed as critical and highly vulnerable energy nodes in the Gulf, the analysts said.

However, oil loading operations at Fujairah have resumed, a Fujairah-based industry source told Reuters on Sunday.

Fujairah, outside the Strait of Hormuz, is the outlet for about 1 ​million barrels per day ​of the UAE's flagship ⁠Murban crude oil - a volume equal to about 1% of world demand.

Global oil supply is expected to fall by 8 million bpd in March due to disruptions ​to shipping while Middle Eastern producers have cut output by at least ​10 million bpd, ⁠according to the International Energy Agency.

Last week, the IEA agreed to release a record 400 million barrels of oil from strategic stockpiles held by member nations to combat price spikes. Japan plans to start releasing its oil on ⁠Monday.

Meanwhile, the ​Trump administration has rebuffed efforts by Middle Eastern allies to start ​diplomatic negotiations, according to three sources familiar with the efforts, while Iran has rejected the possibility of any ceasefire until U.S. and ​Israeli strikes end, dimming hopes of a quick end to the conflict.

Oil prices stayed over $100 per barrel Friday while stock markets slid, with no end in sight to disruption in crude supplies as war rages on in the Middle East.

With the conflict heading toward its third week, equity markets continued falling amid investor worries of an extended crisis that could fan inflation and hammer the global economy.

The price of Brent crude, the benchmark international oil contract, dipped below $100 during the day, sending equities briefly higher.

But stocks slid back into the red as Brent climbed back above the $100 mark.

It closed at $103.14 per barrel, and has soared by more than 42 percent since the start of the conflict.

US-Israeli strikes on Iran on February 28 plunged the Middle East into war, sparking a surge in fuel prices as Tehran vowed to choke the Strait of Hormuz -- a critical artery for global energy transport.

"Crude oil is continuing to dictate direction for markets as we head towards the end of a volatile week," said Fawad Razaqzada, market analyst with Forex.com.

"The pressure remains with no end in sight in the Middle East conflict," Razaqzada added.

"Traders are trying to figure out what a fair value for crude oil is right now, given the big release of emergency oil reserves, and the temporary relaxation of sanctions on Russian oil sales that's already at sea," he said.

Iran's threats over the Strait of Hormuz, through which a fifth of global crude oil and liquefied natural gas passes, is causing worries of rising prices rippling through the world economy.

"Fears of a burgeoning energy crisis remain front and center for investors," noted Joshua Mahony, chief market analyst at Scope Markets.

"Inflationary fears are particularly prevalent," Mahony added.

Major central banks, which prior to the war's outbreak were heavily forecast to keep cutting interest rates, are now widely expected next week to freeze borrowing costs or even hike them to keep a lid on inflation.

An unprecedented seven central banks are due to hold meetings on interest rates next week.

Investors also digested updated US economic growth data for the fourth quarter, which was revised down to 0.7 percent from an initial reading of 1.4 percent.

And delayed data showed the US Federal Reserve's preferred inflation gauge had dipped to 2.8 percent in January.

This is still higher than the Fed's two-percent inflation target, and reflects a period before energy prices shot higher.

The US central bank now faces an environment where inflation remains sticky and could soon be boosted by energy prices, while GDP growth and the labor market continue to lose momentum, said eToro US Investment Analyst, Bret Kenwell.

On foreign exchange markets, the dollar held gains against major rivals owing to its safe-haven status and expectations that US interest rates will remain elevated longer than expected.

AJ Bell investment director Russ Mould said next week's central bank meetings "come at a delicate time."

"Markets will be watching closely for any signals on how they plan to deal with surging oil and gas prices and whether they see it as a short-term bump to look through."

A tanker's sudden change of course in early March reflects a shift in Russia's energy fortunes.

From 22 to 26 February, the Hong Kong-flagged tanker Sarah turned off its transponders to load Russian oil from smaller ships off the coast of Oman. It then headed towards Singapore, where the cargo was likely to be transferred to another vessel bound for China.

But on 6 March, a day after the United States issued a 30-day sanctions waiver allowing Indian refiners to buy Russian crude, the tanker changed course. It is now scheduled to arrive at a refinery in western India today (14 March), reports The Economist.

The change reflects a wider shift since the start of the Iran war. The de facto closure of the Strait of Hormuz has trapped around 15% of global oil supply in the Gulf.

Brent crude, the global oil benchmark, fell to $59 a barrel in December amid expectations of oversupply. It is now around $100. Higher prices have made Russian oil more attractive to buyers. On 12 March, the United States extended its waiver to allow countries to purchase Russian oil that had already been loaded onto tankers.

Before the crisis, Russia's oil revenues had been declining. Many refiners in India and China, Russia's largest customers, stopped buying Russian crude around November before US sanctions on Rosneft and Lukoil took effect.

By February, Russia's export volumes had fallen by about a fifth. Together with lower prices, this meant the Kremlin's oil-and-gas revenues were 44% lower than a year earlier. In the first two months of the year, Russia's budget deficit reached 3.4 trillion roubles, about nine-tenths of its target for the whole of 2026.

Higher prices and renewed demand are now helping reduce a backlog of Russian oil shipments at sea. India has increased its purchases by about half, helping cut Russia's floating oil inventory by more than 10% to around 122 million barrels. China's imports have also risen.

Because these shipments had already been sold, the immediate financial benefit goes mainly to traders rather than the Russian government.

The absence of Gulf oil has increased demand for alternative supplies. Russian crude is similar in quality to Middle Eastern oil and easier for many Asian refineries to process. Urals crude delivered to India, which had previously been sold at a discount, is now priced above Brent.

Sergey Vakulenko, a former executive at Gazprom Neft, estimates that every $10 increase in Brent prices over a month raises Russia's energy export revenues by about $2.8 billion, of which roughly $1.6 billion goes to the state.

The crisis has also complicated efforts by Western countries to tighten sanctions on Russia. Before the conflict, the United States had considered tougher measures against Russia's "shadow fleet" of tankers and possible secondary tariffs.

The recent waivers have also widened differences with the European Union. The European Commission had proposed a ban on maritime services for Russian oil exports, but the plan faces opposition from Hungary and Slovakia.

Concerns over energy supply may also lead some European countries to reconsider plans to stop importing Russian liquefied natural gas next year.

China, which receives about one-third of its liquefied natural gas from the Gulf region, is also concerned about supply disruptions. This may increase interest in overland energy supplies from Russia, including the proposed Power of Siberia 2 pipeline, a 2,600-kilometre project that could significantly increase Russian gas exports to China.

Despite higher prices, analysts say Russia's gains may be limited. Ukrainian attacks on oil facilities, sanctions and reduced investment have weakened the industry.

Russia is estimated to have about 300,000 barrels per day of spare production capacity, far below the 10–15 million barrels per day of supply affected by disruptions in the Gulf.

Analysts also say Russia's oil output is likely to decline over time. Higher prices may provide temporary relief, but they are unlikely to reverse the longer-term pressures on Russia's energy sector.

Stocks fell and the US dollar strengthened on Friday as uncertainty over the Iran war continued to disrupt energy supplies, heightening concerns over fuel prices and interest rates.

The price of oil crossed $100 per barrel even as an Indian tanker sailed out of the Strait of Hormuz and the US put forth measures to try to ease supply concerns.

All three major US stock indexes logged daily and weekly declines. The Dow Jones Industrial Average finished Friday down 0.25%, the S&P 500 fell 0.6% and the Nasdaq Composite dropped 0.9%.

European shares extended their declines as well, with Europe's STOXX 600 down 0.5% on Friday. MSCI's gauge of stocks across the globe fell 0.9%.

The dollar has become the safe haven of choice during the tumult, putting most other currencies under pressure. The US currency gained for the second consecutive week, up 0.8% on the day against a basket of currencies.

Oil price driving market

President Donald Trump said the US was going to be hitting Iran "very hard over the next week," shortly after issuing a partial 30-day waiver for purchases of sanctioned Russian oil, hoping to ease prices.

Front-month WTI crude futures settled at $98.71 per barrel, up 3.11%. Brent rose 2.67% to $103.14, settling above $100 per barrel for the first time since August 2022.

Traders are trying to predict how long the disruption to oil supplies will last.

"Headlines are coming at the market like water from a fire hose, which is impacting the price of oil, and consequently, financial markets," said Mitch Reznick, group head of fixed income at Federated Hermes.

With Iran stepping up attacks across the Middle East as its new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping lane closed, investors are bracing for a prolonged conflict and higher oil prices.

The spectre of rising inflation has led markets to rapidly reprice what they expect from central banks this year, with traders now anticipating just 20 basis points of easing from the Federal Reserve compared to 50 bps of cuts priced in last month.

Two-year Treasury yields, which typically move in step with Fed interest rate expectations, hit a six-month high on Thursday.

Elsewhere, the Personal Consumption Expenditures index, the Federal Reserve's preferred inflation gauge, rose 0.3% in January on a monthly basis, in line with economists' estimates.

At the same time, US economic growth slowed more sharply than initially thought in the fourth quarter amid downward revisions to consumer spending and business investment, government data showed on Friday.

"With markets laser-focused on oil prices and geopolitics, today's numbers may mostly fly under the radar," Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in an email.

"Despite signs of economic softening, more sticky inflation data simply strengthens the idea that the Fed will remain on the sidelines."

Shifting rates outlook

Interest rate futures that had been priced for two quarter-point cuts by the end of the year before the conflict began are now barely pricing in one.

For US government bond trading on Friday, the two-year note yield fell 3.3 bps to 3.73% after hitting its highest level since August 22 on Thursday. US 10-year notes ticked up to 4.283%.

Investor focus will switch to a slate of policy meetings next week, with the Fed, the Bank of Japan, the European Central Bank and the Bank of England all due to meet, with most expected to keep rates unchanged.

In currencies, the euro fell 0.8% to $1.1417, while the yen hit its weakest since July 2024 at 159.66 per US dollar on Friday as Japan warned it was ready to take action to protect against yen declines.

Analysts said the bar for intervention is higher this time around, as any action now could prove futile in the face of relentless dollar buying.

Gold was 1.27% lower at $5,014 per ounce on Friday, capping a drop on the week.

Top US and Chinese economic officials are set to launch a new round of talks in Paris on Sunday to iron out kinks in their trade truce and clear a smooth path for US President Donald Trump's trip to Beijing to meet with Chinese President Xi Jinping at the end of March.

The discussions, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, are expected to focus on shifting US tariffs, the flow of Chinese-produced rare earth minerals and magnets to US buyers, American high-tech export controls and Chinese purchases of US agricultural products.

The two sides will meet at the Paris headquarters of the Organisation for Economic Cooperation and Development, a source familiar with their planning said.

China is not a member of the club of 38 mostly wealthy democracies and considers itself a developing country.

US Trade Representative Jamieson Greer will also join the talks, which continue a string of meetings in European cities last year aimed at easing tensions that threatened a near collapse of trade between the world's two largest economies.

US-China trade analysts said that with little time to prepare and Washington's attention focused on the US-Israeli war with Iran, prospects for a major trade breakthrough are limited, in Paris or at the Beijing summit.

"Both sides, I think, have a minimum goal of having a meeting, which sort of keeps things together and avoids a rupture and re-escalation of tensions," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington.

Trump may want to come away from Beijing with major Chinese commitments to order new Boeing aircraft and buy more US liquefied natural gas and soybeans, but to get that he may need to offer some concession on US export controls, Kennedy added.

Instead, Kennedy said chances were high for a summit that "superficially suggests progress but that really just leaves things about where they've been for the last four months."

Trump and Xi could potentially meet three other times this year, including at a China-hosted APEC summit in November and a US-hosted G20 summit in December that could yield more tangible progress.

Iran war oil concerns

The US-Israeli war on Iran will likely come up at the Paris talks, especially in reference to the spike in oil prices and the closure of the Strait of Hormuz, through which China gets 45% of its oil.

Bessent on Thursday night announced a 30-day waiver of sanctions to allow the sale of Russian oil stranded at sea in tankers, a move to raise supplies.

On Saturday, Trump urged other nations to help protect shipping in the Strait of Hormuz after Washington bombed military targets on Iran's Kharg Island oil loading hub and Iran threatened to retaliate.

China's state-run China Daily newspaper in an editorial called for continuity in the US-China dialogue as a "stabilizing anchor" amid the uncertainty of the "ongoing crisis in the Middle East" and the best way to address specific differences on issues including strategic materials, technology, market access and agriculture.

Goldman Sachs raised its Brent, WTI crude oil price forecasts for the fourth quarter of 2026 to $71/67 per barrel from $66/62 as it sees longer ​disruption to oil flows in the Strait of Hormuz due to ‌the US-Israeli war on Iran.

Brent prices have gained more than 36 percent since the war began on February 28, while WTI has risen about 39 percent. Both benchmarks briefly topped $119 on ​Monday, their highest levels since mid‑2022.

The fighting has effectively shut the ​Strait of Hormuz, leaving tankers stranded for more than a week and forcing producers to suspend output as storage nears capacity.

Goldman analysts in ​a note on Thursday said they now assume 21 days of low Strait ​of Hormuz (SoH) oil flows at 10 percent of normal levels followed by a 30-day gradual recovery, compared with their earlier expectation of a 10-day disruption.

The bank also said that daily ​oil prices are likely to exceed their 2008 peak if SoH flows ​remain depressed through March.

Goldman incorporated a larger policy response in its models, wherein 254 million barrels ‌of ⁠actual global special petroleum reserve (SPR) releases and 31mb of draws in Russian crude would reduce the hit to global commercial oil inventories by nearly 50 percent.

The International Energy Agency on Wednesday agreed to release a record 400 million barrels of oil from ​strategic stockpiles to combat ​a spike in ⁠global crude prices since the start of the war, with the US contributing the bulk of the supply.

In Goldman’s base case ​where Strait of Hormuz flows start recovering March 21 onwards, ​it assumes ⁠IEA member states won’t fully release the 400 million barrels available.

This is because the bank assumes a logistical limit of 3 million barrels per day on draws from ⁠the ​Organisation for Economic Co-operation and Development (OECD) SPR and ​a four-week phase-out of releases through early June when WTI prices are expected to moderate to ​the low $70s.

Gold prices slipped on Friday and were on track for a second ‌consecutive weekly decline, pressured by a stronger dollar and inflation worries driven by the Iran war, which weighed on rate‑cut expectations.

Spot gold fell 0.5 percent to $5,052.15 per ounce, by 1:44 p.m. ET (1744 GMT), ​and was down over 2 percent for the week so far.

US gold futures for ​April delivery settled 1.3 percent lower at $5,061.70.

The US dollar rose across the board on Friday, set ​for a second straight weekly gain, as the war in the Middle East drove investors toward safe-haven assets and weighed on ‌energy-sensitive currencies such as the euro.

President Donald Trump said the US was going to be hitting Iran “very hard over the next week”, shortly after issuing a partial 30-day waiver for purchases of sanctioned Russian oil, hoping to ease prices fuelled by the US-Israeli war on Iran.

A sharp and prolonged rise in oil prices would severely hurt the economies of Japan and ​the euro zone, which are heavily reliant on crude imports, while the United States would be relatively insulated, having been a net crude ​exporter for almost a decade.

“Global investors are unwinding cross-border exposures, pushing money into safe havens, and punishing currencies issued by net energy importers,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

The euro was 0.6 percent lower against the dollar at $1.14395. The dollar index , ​which measures the greenback’s strength against a basket of currencies, was up 0.7 percent at 100.35. The index is up 1.5 percent for the week.

Schamotta, however, warned that ​FX markets face two-way risks.

“As the war drags on, both Tehran and Washington have strong motivations for returning to the negotiating table and there are good reasons to suspect they could strike a face-saving bargain as soon as this weekend,” said Schamotta.

US liquefied natural gas (LNG) companies are projected to earn more than $1 billion per week in additional profits as global energy prices surge amid the ongoing conflict involving Iran, according to new data from energy research firm EnergyFlux.

The crisis escalated after a US–Israel coalition launched strikes in Iran on 28 February, destabilising global energy markets. The situation intensified when Qatar shut down its Ras Laffan LNG facility, which accounts for about 20% of global LNG supply, triggering a worldwide supply shortage.

EnergyFlux data shows that profits from a single LNG cargo shipped from the United States to Europe have doubled from around $25 million last week to more than $50 million as of 2 March.

Analysts estimate that if the Ras Laffan plant remains closed for a month, US LNG exporters could earn up to $4 billion in extra profits. If disruptions continue through the summer, the figure could rise to around $20 billion per month.

Shares of major US LNG exporters have already surged. Venture Global and Cheniere Energy saw their share prices rise by about 23% and 11%, respectively, following the market shift. Venture Global has also been reported to have close ties to former US President Donald Trump.

The increase in LNG profits comes alongside a broader spike in energy prices. Since the conflict escalated, Brent crude oil prices have risen about 14%, European natural gas prices have jumped 75%, and Asian LNG spot prices have climbed roughly 47%.

With Middle Eastern supply disrupted, Europe and Asia are increasingly turning to alternative suppliers, particularly the United States. Rapid expansion of liquefaction facilities over the past decade has made the US the world's largest LNG exporter, accounting for around 25% of global exports in 2025.

Europe remains the primary destination for US LNG, especially after the region reduced reliance on Russian pipeline gas following the 2022 invasion of Ukraine. Countries such as Spain, Germany, Italy, the Netherlands and the United Kingdom have expanded or are expected to increase imports from the United States.

Asian countries including China, Japan, South Korea, Bangladesh and India may also increase LNG imports from the US if the Iran crisis continues, as many of them depend heavily on LNG for electricity generation and industrial use.

Energy experts say the situation highlights how LNG has become both a commercial commodity and a geopolitical tool, while also underscoring the importance of diversifying energy sources and accelerating the shift toward renewable energy.

President Donald Trump on Tuesday said Indian energy giant Reliance Industries was backing a deal to build the first new major oil refinery in the United States in half a century.

Trump made the announcement via his Truth Social platform, saying the company America First Refining would construct the new facility at the Port of Brownsville, Texas.

“This is a historic $300 billion dollar deal -- the biggest in US history,” Trump wrote, framing the project as a cornerstone of his energy agenda, but offering no details on the plan.

“Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous Investment,” he said, without specifying the company’s commitment.

Reliance is India’s biggest privately held conglomerate and its Jamnagar refinery is the world’s largest.

The America First Refining website says the company is a project of Element Fuels, which first announced plans in 2024 to build a Brownsville refinery at cost of between $3-$4 billion.

The facility would be the first refinery built on the Gulf of Mexico since the 1970s, and the only one designed to process 100 percent American shale oil, the company said.

Oil prices rebounded on Wednesday as markets doubted whether the International Energy Agency’s reported plan for a ​record release of oil reserves could offset potential supply shocks from the US-Israeli conflict with Iran.

Brent futures traded up 59 cents, or 0.7 percent, at $88.39 a barrel ‌by 0727 GMT. US West Texas Intermediate (WTI) traded 98 cents higher, or 1.2 percent, at $84.43 a barrel.

Both contracts extended losses in early Asian trade, after plunging more than 11 percent on Tuesday, despite US crude prices leaping 5 at the market’s opening.

The IEA’s proposed drawdown would exceed the 182 million barrels of oil that IEA member countries put onto the market ​in two releases in 2022 when Russia launched its full-scale invasion of Ukraine, the WSJ said, citing officials familiar with the matter.

In ​a note to clients, Goldman Sachs analysts said that a stockpile release of that size would offset 12 days of the investment bank’s estimated 15.4 million barrel-per-day Gulf exports disruption.

The US and Israel pounded Iran on Tuesday with what the Pentagon and Iranians on the ground ​called the most intense airstrikes of the war.

The US military also “eliminated” 16 Iranian mine-laying vessels near the Strait of Hormuz on Tuesday, the US Central Command said, ​as US President Donald Trump warned any mines laid in the Strait by Iran must be removed immediately.

Some analysts were sceptical about the IEA’s proposal and its impact on oil prices.

“Moves like IEA SPR release are not the solution to the crisis. How oil prices will evolve will depend on the duration of the Iran war,” said DBS ​energy sector team lead Suvro Sarkar.

Near-term upside price risks will be “reined in through periodic strategic signalling moves like we have seen over the past couple ​of days to calm markets down”, Sarkar added.

G7 officials have also gathered online to discuss a potential release of emergency oil stockpiles to soften the market blow.

French President Emmanuel ‌Macron will host ⁠a video call with other G7 country leaders on Wednesday to discuss the impact of the conflict in the Middle East on energy and measures to address the situation.

Trump has repeatedly said the US is prepared to escort tankers through the Strait of Hormuz when necessary. However, sources told Reuters the US Navy has refused requests from the shipping industry for military escorts as the risk of attacks is too high for now.

The president and his energy team are closely watching the markets, speaking with industry leaders, and the US military is

Abu Dhabi state ​oil giant ADNOC has shut its Ruwais refinery ​in response to a fire ⁠at a facility within the complex following a drone strike, according to a source, marking the latest energy infrastructure disruption due to the US-Israeli war on Iran.

Saudi Arabia, the world’s largest oil exporter, is seen boosting supplies via ​the Red Sea, although they are still far below the levels needed to compensate for the drop in ​flows from the Strait ⁠of Hormuz, shipping data showed.

The kingdom is relying on the Red Sea port of Yanbu to help it boost exports to avert steep production cuts as its neighbours Iraq, Kuwait and the United Arab Emirates have already reduced output.

Energy consultancy Wood Mackenzie said the war is currently cutting Gulf oil and oil products supply ⁠to the ​market by some 15 million barrels per day, which could raise crude prices to $150 per barrel.

“Even ​a quick resolution probably implies weeks of disruption for energy markets yet,” Morgan Stanley said in a note.

Reflecting higher demand, US crude, gasoline and distillate stocks fell last week, market sources said, ​citing American Petroleum Institute figures on Tuesday.

Gold edged higher on Wednesday on safe-haven demand and as ‌a retreat in oil prices calmed inflation worries, reviving expectations for potential Federal Reserve rate cuts this year as investors awaited US CPI data that may offer more cues.

Spot gold was up 0.1 percent at $5,198.29 ​per ounce, as of 0641 GMT. US gold futures for April delivery fell 0.7 percent ​to $5,206.40.

Oil prices dropped below $90 per barrel amid reports that the International Energy Agency proposed the largest release of oil reserves in its history to curb surging prices.

“With ​these (inflation) concerns having eased... hedging and safe-haven attributes (of gold) have once again come to the fore. So, ​I think from current levels we remain optimistic,” said Nikos Kavalis, Singapore managing director of Metals Focus.

The US and Israel pounded Iran with what the Pentagon and the Iranians on the ground called the most intense ​airstrikes of the war, despite global markets betting that Trump will seek to end ​the conflict soon.

The war has effectively shut the Strait of Hormuz, a chokepoint for a fifth of global ‌oil and liquefied natural gas, stranding tankers for more than a week and forcing producers to halt output as storage fills, driving energy prices soaring.

Bullion, traditionally viewed as a safe-haven asset, has risen more than 20 percent so far this year, notching successive record highs amid heightened geopolitical and ​economic uncertainty.

“I think it’s ​very likely that ⁠we’ll see gold get to over $6,000 an ounce by the third or fourth quarter this year, probably even higher early next year,” Kavalis ​said.

Markets are now awaiting the US consumer price index for February, ​due later ⁠in the day, and the Personal Consumption Expenditures (PCE) index - the Fed’s preferred inflation gauge - on Friday.

Investors expect the Fed to keep rates steady at the end of its two-day meeting on March ⁠18 ​but still see at least two rate cuts this year, ​per CME Group’s FedWatch tool.

Iranian crude oil has continued to flow through the Strait of Hormuz at a near-normal pace even as Tehran-linked attacks on ships in the narrow waterway have decimated exports from other Gulf countries, a Reuters ‌review of tanker tracking data showed.

Iran has exported about 13.7 million barrels of crude oil since Israel and the US launched attacks on the country on 28 February, according to analysis from TankerTrackers.com, a maritime intelligence company that specializes in tracking the so-called shadow fleet, a network of vessels used to transport oil and gas from countries under Western sanctions.

Vessel tracking service Kpler pegged Iranian exports in the first 11 days of March even higher at about 16.5 million barrels.

Iran's retaliation to the Israeli and US attacks has included strikes on ships in the Strait of Hormuz and energy infrastructure across the Middle East, bringing non-Iranian vessel transits through the main gateway for ⁠much of Middle Eastern oil exports to a near standstill and forcing producers in the region to cut output.

Ran's ability to keep exporting oil without any reported interceptions contrasts sharply with what happened during the US military campaign in Venezuela, which involved a naval blockade of the Latin American nation and seizures of vessels attempting to enter or exit Venezuelan waters.

"I'm surprised, given their successful seizures of Venezuela-related vessels this past December, that the US did not initiate a similar campaign prior to starting this conflict, or has not done so at this time," said David Tannenbaum, a director at consulting firm Blackstone Compliance Services.

However, US efforts to stop Iran-linked tankers could unleash more attacks on vessels passing the Strait of Hormuz, Next Barrel oil and shipping analyst Matias Togni said.

So long as Iran is moving its vessels through the region, Iran has an incentive to keep the Strait of Hormuz open at least to some degree, said James Lightbourn, shipping financier and founder of Cavalier Shipping, maritime investing and advisory business.

"If the US were seizing tankers, it would give Iran less ‌to lose ⁠by shutting the strait entirely (such as with mines)," Lightbourn said.

US President Donald Trump's White House did not immediately reply to a request for comment on whether Washington plans any actions against Iranian oil exports.

Iranian exports at pace similar to last year

The TankerTracker.com and Kpler data indicate Iran's crude oil exports equate to between 1.1 million barrels per day and 1.5 million bpd from 28 February through 11 March. The country's average exports last year were 1.69 million bpd, according to Kpler records.

The pace could pick up In the days ahead. Multiple very large crude carriers, the largest oil vessels in service, ⁠are still loading oil at Iran's Kharg Island export hub, according to satellite imagery reviewed by TankerTrackers.com.

Prior to the February 28 strikes, Iran had ramped up exports to about 2.17 million bpd in February in anticipation of Israeli-US military action, Kpler data showed. Record oil exports from Iran were about 3.79 million bpd in the week of February 16, the data showed.

Six crude oil tankers have left ⁠Iran since 28 February, including the US-sanctioned vessel Cuma, which sailed this week, according to analysis from Kpler and Lloyd's List Intelligence. Two liquefied petroleum gas tankers, also under US sanctions, sailed out of Iranon Friday after loading cargoes, Reuters earlier reported.

At least 11 million barrels of crude oil have been shipped out of Iran, with four supertankers that left Iran ⁠carrying 8 million barrels arriving in waters around Singapore, a separate analysis showed.

The vessels follow the same pattern of sailing within Iran's exclusive economic zone, which extends up to 24 miles and beyond local territorial limits of 12 nautical miles.

This is seen as providing the vessels with a measure of protection by keeping them within Iran's waters, shipping sources said.

The dollar lost some of its safe-haven appeal on speculation that the war in the Middle East could prove limited on Tuesday, pulling down skyrocketing ​oil prices and boosting risk assets.

At 157.73 yen and $1.1632 per euro, the ‌greenback was firm in early Asia trade, but it has retreated from day-earlier highs after US President Donald Trump said war against Iran was "very complete." Washington was "very far ahead" of his initial four- to five-week ​time estimate, he told CBS News.

The comments were quickly rejected as "nonsense" by Iran's Revolutionary ​Guards, but they seemed to hold traders back from deepening worries about ⁠an oil shock and put them in a wait-and-watch stance.

Brent crude futures traded at $92.46 ​a barrel in the Asia morning, down from highs near $120 on Monday.

The risk-sensitive Australian dollar , ​which has loitered around 70 cents since war broke out, steadied at around $0.7068.

"The market is just taking a breather," said Rodrigo Catril, senior currency strategist at National Australia Bank in Sydney.

"We're cautious in the sense ​that it may not be as simple as just declaring the end of the ​war ... our sense is that we haven't seen the end of the volatility."

The dollar has been traders' ‌shelter-of-choice as ⁠US and Israeli attacks on Iran have all but frozen oil and gas exports through the Strait of Hormuz, sending energy prices soaring.

Investors are worried that could curtail global growth by acting as a tax on business and consumption, while at the same time pushing central banks ​away from easing rates.

Sterling ​recovered from a ⁠Monday dip to hold at $1.3412 and the New Zealand dollar steadied at $0.5932.

A Deutsche Bank analysis on Monday suggested larger market moves out of ​risky assets could require oil prices to stay at higher levels, a ​policy pivot ⁠from central banks and tangible signs of a broader economic slowdown.

"How close are we to meeting those thresholds? Much closer than a week ago," said strategist Henry Allen.

"But on several metrics ⁠we aren't ​quite there yet, which explains why equities aren't yet ​seeing bear-market declines, like we saw in 2022," he said, referring to the aftermath of an energy shock triggered ​by Russia's invasion of Ukraine.

Iran's Revolutionary Guards said on Tuesday they would not let any oil be shipped from the Middle East ​if US and Israeli attacks continue, prompting President Donald Trump to say the US would hit Iran much harder if it blocked exports.

The rhetoric did little to quell a fall ‌in crude prices and a rally in global shares that followed Trump expressing confidence in a swift end to hostilities, even after Iran showed defiance by naming Mojtaba Khamenei as its new supreme leader.

Trump said on Monday the US had inflicted serious damage on Iran's military. He also predicted the conflict would end before the initial four-week time frame he had set out, although he has not defined what victory would look like.

Israel says its war aim is to overthrow Iran's system of clerical ​rule.
"Our aspiration is to bring the Iranian people to cast off the yoke of tyranny," Israeli Prime Minister Benjamin Netanyahu said in a statement issued by his office on Tuesday.

"In the ​end, that depends on them. But there is no doubt that through the actions taken so far we are breaking their bones - and our hand is ⁠still extended," he said. "If we succeed together with the Iranian people, we will bring about a permanent end - if such things exist in the life of nations."

US officials have mainly said Washington's aim is ​to destroy Iran's missile capabilities and nuclear programme, but Trump has said the war can end only with a compliant Iranian government.

At least 1,332 Iranian civilians have been killed and thousands wounded, according to Iran's ​U.N. ambassador, since the US and Israel began air and missile strikes across Iran at the end of February.

Trump said US attacks could increase sharply if Iran sought to block tanker traffic through the Strait of Hormuz, which handles one-fifth of the world's oil supply.

“We will hit them so hard that it will not be possible for them or anybody else helping them to ever recover that section of the world," Trump told a press conference on Monday.

IRAN SAYS IT ​WILL DETERMINE END OF WAR

The Islamic Revolutionary Guards Corps said it would not allow any oil to leave the region if attacks from the US and Israel continue.

"We are the ones who will determine the ​end of the war," a spokesperson said, describing Trump's comments as "nonsense", according to state media.

In a later Truth Social post, Trump repeated his warning.

"If Iran does anything that stops the flow of Oil within the Strait of Hormuz, ‌they will be ⁠hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far," he said.

Saudi Aramco, the world's top oil exporter, warned on Tuesday of "catastrophic consequences" for global oil markets if the war continued to disrupt shipping in the Strait of Hormuz.

The strait is the world's most vital oil export route, connecting the biggest Gulf oil producers with the Gulf of Oman and the Arabian Sea.

The war has already effectively shut the Strait of Hormuz, leaving tankers unable to sail for more than a week and forcing producers to halt pumping as storage facilities fill.

Iranian Foreign Minister Abbas Araqchi said Tehran was ​unlikely to resume negotiations with the U.S, which he ​said had spoken of progress after three ⁠rounds of talks.

"Still, they decided to attack us. So, I don't think talking to the Americans anymore would be on our agenda any more," he said in an interview with PBS.

The appointment on Monday of Mojtaba Khamenei to succeed his slain father, Ayatollah Ali Khamenei, appeared to dash hopes of a swift end ​to the war, sending oil markets surging and share markets nosediving. Markets swung in the other direction when Trump predicted a quick end to the ​war and after reports of ⁠a possible ease in sanctions on Russian energy.

After speaking with Russian President Vladimir Putin, Trump said the US would waive oil-related sanctions on "some countries" to ease the shortage.

According to multiple sources, that could mean a further easing of sanctions on Russian oil, which could complicate efforts to punish Moscow for its war in Ukraine. Other options include a possible release of oil from strategic reserves or restricting US exports, sources said.

Brent crude futures fell more ⁠than 10 percent on ​Tuesday after soaring by as much as 29 percent on Monday to their highest since 2022. Global stock markets also bounced.

The price ​of gasoline has particular political resonance in the United States, where voters cite rising costs as a top concern ahead of the November midterm elections, when Trump's Republicans will try to keep control of Congress.

A Reuters/Ipsos poll released Monday found 67 percent of Americans expect ​gas prices to rise over the coming months, and only 29 percent approve of the war.

India's private carriers Air India and its subsidiary Air India Express on Tuesday announced they will start levying a fuel surcharge on each domestic flight ticket from 12 March and also for flights to SAARC countries due to a hike in jet fuel prices amid the Middle East conflict.

The two carriers will hike the charge for bookings for other international destinations and the new fuel surcharges will be implemented in a phased manner, said a statement from the airlines.

"Air India group announced a phased expansion of a fuel surcharge on its domestic and international routes, necessitated by the steep rise in jet fuel prices arising from the geopolitical situation in the Gulf region," the statement reads.

In the first phase, a fuel surcharge of Rs 399 per domestic flight ticket would be imposed from 12 March and the same will also be applicable for SAARC flights, the statement said.

For West Asia flights, the fuel surcharge will be $10 and hiked by $30 to $90 for Africa flights and by $20 to $60 for Southeast Asia services.

All these changes will be effective from 12 March, including for flights to and from Singapore.

Currently, there is no fuel surcharge for the Singapore services.

Thailand and Vietnam are urging public employees and businesses to adopt remote work as well as energy-saving habits, as the US-Israel war on Iran in the Middle East disrupts oil supplies and causes fuel price volatility.

Authorities in Thailand stated that government staff should transition to remote work when possible and requested that state offices maintain air conditioning at 26°C to save energy, reports Al Jazeera.

They also advised officials to cancel non-essential overseas travel.

In neighbouring Vietnam, the government has eliminated duties on various imported petroleum products to prevent shortages and stabilise the local market.

Furthermore, the Vietnamese government encouraged companies to permit remote work whenever feasible to reduce fuel demand.

It also recommended that citizens limit the use of private vehicles in favour of public transportation, cycling or carpooling.

Oil prices plummeted 7 percent on Tuesday after soaring to a more than three-year high in ​the previous session as US President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to oil ‌supplies.

Brent futures were down $7.15, or 7.2 percent, at $91.81 a barrel by 1307 GMT, while US West Texas Intermediate (WTI) crude was down $6.26, or 6.6 percent, at $88.51 a barrel. Both contracts fell as much as 11 percent earlier in the day.

Trading volumes in Brent dropped to about 328,000 contracts, the lowest amount since February 27, just before the start of the US-Israeli war on Iran. Volumes in WTI ​fell to 296,000 contracts, the lowest since February 23.

Oil surged to more than $119 a barrel on Monday to its highest since mid-2022 as supply cuts by Saudi ​Arabia and other producers stoked fears of major disruptions to global supplies.

Prices later retreated after Russian President Vladimir Putin had a ⁠call with Trump and shared proposals aimed at a quick settlement to the war, according to a Kremlin aide, easing concerns about oil supply.

Trump said on Monday in a ​CBS News interview that he thought the war against Iran was "very complete" and Washington was "very far ahead" of his initial four- to five-week estimated time frame.

“Clearly Trump's comments ​about a short-lived war have calmed markets. While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today," said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the market was under-appreciating risks at these levels for Brent.

“Murban and Dubai grades are still well above $100 per barrel, so practically nothing much has changed ​in terms of ground realities," he added, referring to benchmark Middle Eastern oil grades.

In response to Trump, Iran's Islamic Revolutionary Guards Corps said they would “determine the end ​of the war” and Tehran would not allow “one litre of oil” to be exported from the region if US and Israeli attacks continued, state media reported on Tuesday.

They're too expensive.

Meanwhile, Trump is considering easing ‌oil sanctions ⁠on Russia and releasing emergency crude stockpiles as part of a package of options aimed at curbing spiking prices, according to multiple sources.

“Discussions around easing sanctions on Russian oil, comments from Donald Trump hinting that the conflict could eventually de-escalate, and the possibility of G7 countries tapping strategic oil reserves all pointed to the same message - that oil barrels will somehow continue to reach the market," Priyanka Sachdeva, a Phillip Nova analyst, said in a note.

“Once traders sensed that supply routes could ​still be maintained, the initial 'panic premium' that ​had pushed prices above the $100 mark ⁠yesterday started to fade, and oil prices quickly pulled back."

Saudi Arabia's Aramco, the world's top oil exporter, said on Tuesday there would be "catastrophic consequences" for the world's oil markets if the Iran war continues to disrupt shipping in the Strait of Hormuz.

“Policy measures ​may have limited impact on oil prices unless safe passage through the Strait of Hormuz is assured, given the potential ​losses of up ⁠to 12 million bpd over the next two weeks," JPMorgan said in a note.

In the latest disruption to global supplies, Abu Dhabi state oil giant ADNOC has shut its Ruwais refinery, a source said on Tuesday, after a fire broke out at a facility within the complex following a drone strike.

Goldman Sachs said because the situation remains fluid, it ⁠was not ​changing its oil price forecast for Brent at $66 per barrel in the fourth quarter and WTI at $62 ​per barrel.

G7 energy ministers will discuss how to tackle soaring energy prices due to the war in Iran on a call on Tuesday while a group of European Union leaders will do so later ​in the day, officials said.