An abrupt halt to Israel and Iran’s 12-day conflict has pushed the oil price below $70 a barrel, its level after President Donald Trump’s Middle East trip last month. Yet even if the fighting is over, uncertainty about what both combatants do next creates scope for fresh shocks.
A 3D printed miniature model of U.S. President Donald Trump, Israel and Iran flags are seen in this illustration taken June 18, 2025. REUTERS/Dado Ruvic/Illustration LONDON, June 24 - When Donald Trump completed his trip to Saudi Arabia, Qatar and the United Arab Emirates in May, complete withpledges of investment, the Middle East seemed on the path to stability.
A month on, following a 12-day war between Israel and Iran, the U.S. bombing of Iranian nuclear facilities, and a retaliatory missile attack by Tehran on Qatar, the question is whether the ceasefire arranged by the U.S. president can revive the previous optimistic mood. There are too many known unknowns for that to be the case. Oil traders are behaving as if everything is back to normal. Brent crude contracts for August delivery were trading at $69 a barrel early on Tuesday, where they were just before Israel attacked Iran on June 13. The subsequent price spike to $80 a barrel allowed for the possibility that Tehran might retaliate by disrupting the tankers carrying a fifth of global oil supply that pass by its southern coast. Tuesday’s post-ceasefire price plunge implies that risk has receded.If Saturday’s U.S. attacks on Iranian nuclear facilities destroyed any prospect of the country obtaining an atomic bomb, oil traders would be right to be relaxed. Coupled with the diminished powers of Iranian proxies like Hezbollah, the region would be tangibly safer than before. Yet it’s far from certain that the nuclear threat has been defused. Iran’s Supreme Leader Ayatollah Ali Khamenei remains in place, and the location and condition of Iran’s stocks of enriched uranium are unclear. Iran also looks less stable. The Islamic Republic has lost a slew of senior military leaders, and Monday’s relatively ineffectual retaliatory strike on Qatar projected weakness more than strength. Iranian authoritiesthe search for a replacement for the 86-year-old Khamenei, five insiders with knowledge of the discussions told Reuters, but the process to replace a leader in power since 1989 may not be smooth. Meanwhile, it’s far from clear that Israel’s campaign is over. Military success will likely shore up Prime Minister Benjamin Netanyahu’s governing coalition. Yet while Netanyahu has declined to say explicitly he is seeking regime change in Iran, he hasOfficials in Saudi, the UAE and Qatar also have scope to feel relatively optimistic. After all, even if Iran’s nuclear capabilities have not been “totally obliterated”, as Trump claimed, progress has probably been extensively delayed. Yet those countries arguably had the same reassurance ten years ago when the United States and other leading countries signed the Joint Comprehensive Plan of Action to limit Iran’s nuclear plan. More recently, Trump had seemed on a path to restoring the agreement. Instead, Middle Eastern countries now face a potentially unstable mix: a vengeful and chastened Iran, and an Israel that feels there is unfinished business. There is plenty of scope for future shocks.Israeli Defence Minister Israel Katz said on June 24 he had ordered the military to strike Tehran in response to what he said were missiles fired by Iran in a violation of a ceasefire announced hours earlier by U.S. President Donald Trump. However, Iran’s ISNA student news agency said reports that Iran had fired missiles at Israel after the ceasefire took effect were false.The pan-European STOXX 600 Index was up 1.4% at 542.6 points, as of 0708 GMT. Brent crude prices dropped to $67 a barrel in earlier trading but rose to trade at $69 a barrel as of 0850 GMT. George Hay is Breakingviews’ EMEA Editor, based in London. He manages the team in Europe, the Middle East and Africa, and also covers the global energy transition. His previous roles have included European Financial Editor coordinating banking coverage during the euro zone crisis and the global financial crisis. Prior to Breakingviews he worked for AFX News and United Business Media, and has an undergraduate degree from Edinburgh University and a Graduate Diploma in Economics from Birkbeck, University of London.
CLM REP TOPNWS ANLINS BACT BISV BIZ BNK BNKS BRVBV BSVC CMPNY CWP DBT FIN FINS GEN INVBIS INVBNK INVBR MEVN NEWS1 STX TOPCMB WAR XDNP XPCO XPMF XRNP GB WEU IL AMERS SWASIA US EUROP MEAST TGLF NAMER EMEA ASXPAC EMRG ASIA IR MTGFX BRVF N2:STX N2:DBT N2:BSVC N2:BNKS N2:INVBNK N2:INVBR N2:FINS N2:BISV N2:INVBIS N2:BACT N2:MEVN N2:WEU N2:GB N2:EUROP N2:CMPNY N2:IL N2:US N2:CWP N2:WAR N2:IR N2:EMEA N2:EMRG N2:SWASIA N2:ASIA N2:MEAST N2:ASXPAC N2:AMERS N2:NAMER N2:GEN N2:TGLF
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