Hello, this is Dylan Butts writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.
U.S. President Donald Trump gave his highly anticipated national address Wednesday night from the White House., providing some updates on the war, but keeping his comments relatively brief at under half an hour.
As expected, the president claimed massive successes in the U.S. campaign, dubbed Operation Epic Fury, mentioning “victories like few people have ever seen before.”
Though he repeated recent claims that the war won’t last much longer, he put the timeframe at another two to three weeks and warned Iran would be hit “extremely hard“ in the meantime.
Oil has jumped, while Asian stock markets reacted negatively to the speech. Global investors will be watching to see what Wall Street — which has been in a recent recovery — thinks of the comments.
What you need to know today
After Trump’s address, most Asia-Pacific markets reversed Thursday gains with major indices from Hong Kong’s Hang Seng index, Japan’s Nikkei 225, South Korea’s Kospi, and Australia’s S&P/ASX 200 all in the red.
Meanwhile, oil jumped in volatile trading, with International benchmark Brent crude futures with June delivery rising nearly 6%.
In his speech, Trump attributed the increase in oil prices to the “Iranian regime launching deranged terror attacks against commercial oil tankers and neighboring countries that have nothing to do with the conflict.” He also repeated requests for allies to help open the Strait of Hormuz, saying the U.S. had already done “the hard part.” And he again talked of bringing Iran “back to the stone ages.”
The market reactions suggest that Trump’s speech has dampened some recent optimism that Washington and Tehran might be nearing a ceasefire. Major American indices had risen on Wall Street on Wednesday for a second consecutive day of recovery.
U.S. Stock futures were down following Trump’s proclamation of several more weeks of war in the Middle East.
Additionally, while Trump had claimed that Iran’s President had requested a ceasefire on Wednesday, he said the U.S. will “consider” the offer only once the Strait of Hormuz is “open, free, and clear.”
“Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!” he wrote on Truth Social earlier on Wednesday. Tehran denied that it requested a ceasefire, Al Jazeera reported later Wednesday morning, citing an unnamed Iranian official.
In addition to his serious threats towards Iran on Wednesday, Trump also turned some ire to some U.S. allies in Europe in comments to the The Telegraph.
According to the report, the president is considering pulling the U.S. out of NATO, calling it a “paper tiger.” The comments represent the president’s latest threat to European allies after their reluctance to help reopen the Strait of Hormuz.
Trump will meet with NATO’s Secretary General Mark Rutte, in Washington, D.C., next week.
— Dylan Butts
And finally…
While choking off most traffic through the Strait of Hormuz, Iran has quietly established a de facto safe-shipping corridor north of Larak Island, as Tehran seeks to monetize its grip on the world’s most important oil shipping artery.
Traffic through the strait has fallen by 90% since the war began on Feb. 28, with Iran targeting vessels attempting to transit the waterway, causing one of the world’s most devastating energy supply shocks in decades.
Select vessels are being routed through Iranian territorial waters near Larak Island — off the coast of its Bandar Abbas port city — where the Islamic Revolutionary Guard Corps, or IRGC, and port authorities vet each ship before granting passage.
“Iran’s IRGC has imposed a de facto ‘toll booth’ regime in the Strait of Hormuz,” said maritime research firm Lloyd’s List Intelligence.
— Anniek Bao
Source: CNBC