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US Treasury Secretary Scott Bessent stated that the US believes Iran has not mined the Strait of Hormuz, citing continued vessel traffic through the critical shipping route despite regional tensions. He emphasized that oil prices are expected to trend lower in the medium term as supply disruptions ease post-conflict. Bessent also reiterated that the Federal Reserve is unlikely to return to quantitative easing, prioritizing conventional monetary tools over large-scale stimulus. These remarks highlight Washington's confidence in maintaining open energy corridors and managing economic stability through policy discipline. For markets, Bessent's comments aim to reassure investors about the resilience of global oil flows and the Fed's commitment to avoiding inflationary policies. The Strait of Hormuz, a vital artery for 20% of global oil shipments, remains a focal point for geopolitical risks. However, the assurance of unmined waters and potential naval escorts could reduce shipping insurance costs and stabilize energy markets. Traders should monitor oil price volatility and Fed policy signals for short-term trading opportunities. The implications for Gulf investors are significant. A sustained lower oil price regime could pressure Middle Eastern economies reliant on hydrocarbon exports. Meanwhile, the Fed's stance against quantitative easing suggests prolonged higher interest rates, impacting global capital flows. MENA investors should watch for developments in Iran-US negotiations and potential military coordination for shipping security, which could influence regional trade dynamics and asset allocations.
