By John Meyer, consultant in financial affairs – Eurasia Business News, June 23, 2025. Article no. 1581
Following the U.S. airstrikes on Iran’s nuclear sites over the weekend, the U.S. dollar gained, while oil futures edged higher amid concerns about potential supply disruptions. However, Dow Jones futures wavered, reflecting investor caution but without a strong selloff, as analysts generally do not expect significant or prolonged crude supply disruptions from the strikes.
Specifically, Dow futures fell modestly by about 0.3% early Monday but later showed signs of recovery, with some futures rising slightly as investors grew cautiously optimistic that the conflict might remain contained. The S&P 500 and Nasdaq futures also experienced minor declines initially but stabilized as the market assessed the situation.
Oil prices surged initially—U.S. crude and Brent crude rose by over 2-3%—due to risk premiums associated with Middle East tensions. Yet, energy analysts such as those from Kpler suggested that the supply impact might be limited because Iran’s ability to retaliate by closing the Strait of Hormuz is constrained, and OPEC+ is likely to increase output in August, which could offset supply concerns.
WTI crude oil futures surged as much as 2.7% on Monday before paring gains to trade below $74 per barrel, with investors closely watching for Iran’s response to US attacks.
One explanation for the relatively limited reaction is markets have already priced in a high degree of uncertainty about the Middle East: Brent crude futures settled at around $77 late Friday, up from below $70 before Israel first struck Iran.
Iran is a major oil producer and exporter and also sits on the narrow waterway, through which about 20% of the world’s crude passes. According to state media, Iran’s parliament voted on Sunday to close the Strait in response to US strikes, although the final decision lies with Iran’s Supreme National Security Council and Supreme Leader.
On June 22, oil prices surged by approximately 11% amid escalating conflict between Iran and Israel, driven by fears of supply disruptions and broader geopolitical risks in the Middle East.
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The dollar’s strength reflects its role as a safe-haven asset amid geopolitical uncertainty, even as gold and Treasury yields remained relatively steady. Overall, markets are balancing the immediate geopolitical risks with expectations that the conflict will not escalate into a broader war that severely disrupts oil supplies or global trade.
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© Copyright 2025 – Eurasia Business News. Article no. 1581.
