Svmuu News: Oil prices rose following a report by Iran's Mehr News Agency of an explosion on Kharg Island. At a press conference on Monday, Trump stated that if Iran fails to meet the demands by the 8 PM EST deadline, the U.S. could destroy all bridges at Iran's power plants within four hours. Such an escalation would likely cause a spike in energy prices.
Furthermore, The Wall Street Journal reported that negotiators are pessimistic about Iran meeting Trump's demands to allow ships free passage through the Strait of Hormuz. However, oil prices have not yet shown significant volatility. Perhaps the market does not believe Trump will adhere to his deadline. AJ Bell analyst Dan Coatsworth said, "Either Washington or Tehran backs down, which could trigger a significant stock market rebound and a retreat in energy prices. Or there is a major escalation of the situation, with various impacts on financial markets." However, there is a third possible outcome. He added, "Another scenario is that the deadline is extended, and the market will once again go through a period of unease, trying to gauge the latest moves from both the U.S. and Iran." (Jin10)