Iran Exit From Talks Puts $100 Brent In Sight

The latest escalation comes as markets are being forced to confront a possibility many had been reluctant to fully embrace: that the conflict could last far longer than expected, keeping pressure on energy prices and inflation worldwide.

Oil prices surged after Iran's state-affiliated Tasnim news agency reported that Tehran would stop indirect negotiations with Washington and move toward closing the Strait of Hormuz in response to what it described as violations of the ceasefire agreement.

The development has heightened concern because the Strait of Hormuz remains one of the world's most important energy corridors, carrying around one-fifth of global oil consumption and a significant share of international LNG supplies.

The reports also referenced the Bab el-Mandeb Strait, another strategically important maritime route linking the Red Sea with the Gulf of Aden.

Nigel Green says investors have repeatedly looked beyond military escalation because they believed negotiations would eventually resume.

Despite months of conflict, crude prices have remained below levels normally associated with severe supply disruptions, reflecting confidence that the fighting would ultimately remain contained.

This confidence is now facing its toughest test.

The significance extends far beyond the oil market itself.

A sustained move above $100 crude would risk reigniting inflation concerns just as many major central banks have been moving towards lower interest rates. Higher energy costs tend to ripple quickly through economies, affecting transportation, manufacturing, business costs and household spending.

Nigel Green says the latest developments could force investors to reassess some of the assumptions that have supported markets this year.

Nigel Green says one of the biggest risks is that markets have underestimated how long the conflict could last.

The deVere CEO believes energy markets are beginning to signal a reassessment of that outlook.

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