Iran-US Tensions Fail to Dent Oil Prices as Saudis Face Shipping Threat

Oil futures have remained steady despite escalating tensions between Iran and the US. President Trump has vowed to hit Iran hard in response to its retaliation, but analysts suggest that this verbal exchange alone may not be enough to impact crude prices.

A reported strike on a Saudi Very Large Crude Carrier (VLCC) in the Strait of Hormuz is considered a more significant threat. This disruption can affect freight rates, war-risk insurance premia, and the front of the crude curve.

The distinction between retaliation that stays confined to proxy or missile exchanges and actual transit volume interruptions is crucial. Disruptions to actual transit volumes, such as those passing through the Strait of Hormuz, can have a more significant impact on prices.

The metal's haven bid has been capped when real rates rise in tandem with gold's muted performance alongside higher yields.