J Sainsbury plc has warned that the conflict in the Middle East will impact both our customers and our business, raising the prospect of lower profits this year as geopolitical pressure feeds through into household budgets and supply chains.
Even post-conflict, we expect [that] some of the trade flows [will] tend to reset rather than return to what they were before the war, said Rob Wilson of the energy data and consulting firm East Daley Analytics.
Markets could remain sensitive to the developments in the Middle East. Tensions remain elevated in the region amid continued incidents in the Strait of Hormuz and a failed attempt for a second round of talks this week, undermining prospects for a near-term resolution.
Traders are simultaneously pricing in two contradictory scenarios: continued political de-escalation on one hand, and the possibility of renewed escalation on the other. This fragile balance leaves the market vulnerable to sudden movements, especially given oil prices' high sensitivity to geopolitical developments in the Middle East.
High energy prices are kryptonite for the housing market. Affordability, especially for those first-time home buyers, is now an elusive dream until oil prices come down and interest rates come down.
Shipping costs have increased by more than 10 percent in the past month due to the US-Israel war on Iran. The 60-day waiver for the Jones Act aimed to lower energy costs but has had little impact on oil prices, which continue to rise amid the ongoing conflict.