As this report is being prepared, US President Donald Trump is still addressing the media, mentioning the possibility of French assistance in the ongoing confrontation with Iran. Trump, sharing his thoughts on the latest developments and potential actions in Iran, maintains that the crisis won’t be protracted.
Markets and Global Supply Chains Strain Under Ongoing Conflict
Global stock markets continue to suffer losses into the third week of the Iran war. Flows from individual investors have fallen to $6.7 billion, below their 12-month average of $7.1 billion. Capital inflows to ETFs have also shrunk by 22%, marking the end of a three-month upward trend.
Energy, Agriculture, and Tech Face Mounting Disruptions
Qatar’s move to cut production has reduced global LNG supply by 20%. Citigroup analysts warn that, unless shipping through the Strait of Hormuz returns to normal by mid-April, several major Asian facilities will be forced to shut down, potentially causing cascading disruptions in global automotive, medical, and consumer goods production lines.
Fertilizer prices are also climbing amid ongoing conflict, raising concerns that global food inflation could worsen. The spike in aluminum prices has hit record highs, prompting Bahrain to curtail operations at the world’s largest aluminum smelting facility. The closure of the strait now threatens markets far beyond oil.
Qatar supplies about 30% of the world’s helium—a resource vital for chip cooling and for rockets like those from SpaceX—which is now facing significant supply constraints. For now, TSMC’s six-month chip inventory buffers the immediate impact, but if the conflict drags into the second half of the year, manufacturers may have to ration reserves, and the chip market will likely price in these risks early, posing further complications for cryptocurrencies.
BCA Research currently assigns only a 30% chance to a diplomatic resolution in the near term. Iran, anticipating the US midterm elections, appears braced for a prolonged conflict to test American domestic politics.
Oil prices reaching $147 if transport lockdowns continue is now seen as a reasonable scenario. Even after hostilities cease, it may take weeks or months for output to recover, making hopes for a rate cut in the first half of the year highly unlikely. The US has only about two months’ worth of rare earth elements needed for advanced weapons manufacturing, making it increasingly reliant on China should the conflict stretch on.
Trump’s Statements Highlight Military Moves, Diplomatic Options
President Trump’s latest remarks concluded around 8:20 p.m., against the backdrop of upcoming elections and unfulfilled hopes for rate cuts. With inflation pressing and the specter of war looming, observers expect Trump—already down in the polls before the fighting—to lose Congressional majorities if costs of living continue to bite. Last year, Trump warned that Democratic victory in the midterms could lead to his impeachment.
Summing up in his most recent address, Trump laid out the current military and diplomatic landscape:
“With all our strength, we have pressed forward these past days. Iran’s air defense systems have been destroyed. The US has struck more than 7,000 targets, focusing on both commercial and military assets. We have cut Iran’s drone attacks by 95 percent. Today, we hit three missile and drone manufacturing sites, struck Kharg Island, and wiped out everything but the oil pipeline corridor.
We destroyed thirty minelayers. I’m not certain if mines have been laid in the strait. I’m calling on other countries to join us.
A few countries have already said they’re on the way—some eager, some less so. I expect only minimal further attacks; Iran has little capacity left. I’m also asking China and Japan for help in Hormuz. We will rapidly ramp up Venezuela’s oil output.
(On the Strait of Hormuz and a possible coalition) Rubio will brief on which countries are involved. Getting to Hormuz is taking time. A number of countries are already en route to the strait. I believe President Macron will send help. UK Prime Minister Starmer has said he’ll consult his advisers about providing assistance.
(On the war’s direction) They want a deal. Our teams are in discussions. Some Iranians want to negotiate, but we don’t know who. We could open the Strait of Hormuz, but it takes two to tango. Ship owners are reluctant to risk their vessels. I think we’ll make a move very soon.
In time, there are other options on the table.
Israel will not use nuclear weapons.
Any countries that disappoint us will be named. The opposition lacks arms, making resistance difficult. When this ends, oil prices and inflation will fall rapidly.”
