Iraq Resumes Oil Exports Via Turkey & Trump Gives Up On Hormuz Help | Daybreak Europe 3/18/2026
Speakers
Summary
- Oil prices pare gains as Iraq resumes ~300k bpd of exports via Turkey's Ceyhan pipeline, providing partial relief but still far below the ~4M bpd typical output affected by the Strait of Hormuz closure.
- President Trump abandons efforts to build a coalition for the Strait of Hormuz, chastising NATO allies; only the UAE has signaled potential involvement. The strait remains effectively shut, sustaining upward pressure on oil.
- The Fed faces a dilemma: weak U.S. unemployment data suggesting economic softness vs. upside inflation risks from elevated oil and energy prices due to the Iran war.
- European natural gas prices are up ~60% since the war began. Europe faces a challenging summer restocking period due to a 20% reduction in Qatari LNG supplies and depleted post-winter inventories, though price spikes may not reach Russia-Ukraine war extremes.
- Ukraine's President Zelenskiy is positioning the country as a supplier of cheap, effective drone defense expertise to Gulf states, seeking to turn the Iran conflict into a strategic partnership and funding opportunity.
- The Iran war distracts from and strains support for Ukraine, complicating EU funding approval and U.S. peace negotiation efforts, creating a fiscal cliff for Kyiv in coming months.
- Heidelberg Materials will implement temporary surcharges on customers due to increased transport and energy costs from the Iran war, reflecting the passthrough of inflationary pressures to industrial sectors.
- The CEO of Heidelberg Materials expresses strong support for the EU's carbon pricing (ETS) scheme, viewing it as essential for the green transition and a stable framework for investment.
- NVIDIA has restarted manufacturing H200 AI accelerators for the Chinese market after securing licenses, indicating a partial easing of U.S. export restriction pressures for specific products.
- Traders are watching for a potential growth shock from the war to trigger a bid for U.S. Treasuries as a haven; until then, sticky dollar strength and elevated yields may persist.
Trade Ideas
The FOMC is in a difficult position, caught between weak U.S. unemployment data (suggesting AI is displacing white-collar jobs) and upside inflation risks from oil/energy prices due to the Iran war. This creates a policy dilemma where acting to support growth could let inflation run, while tightening to curb inflation could harm a softening labor market. Traders see Powell needing to tread a very fine line. This delicate balance is likely to cause significant volatility in bond markets, particularly a flattening of the Treasury yield curve, around the Fed's messaging. A clear de-escalation in the Iran war that rapidly reduces energy price pressures.
Europe faces a "very tricky summer" for natural gas replenishment due to a 20% cut in Qatari LNG supplies (from Hormuz closure) and low post-winter inventories, forcing competition with Asia for cargoes. This supply shock, combined with high underlying demand as a net energy importer, will sustain elevated gas prices in Europe as it attempts to refill storage for next winter. The sector faces significant cost and supply headwinds, with the full impact expected to hit in April when missing Qatari cargoes are felt. A rapid reopening of the Strait of Hormuz or a swift end to the Iran conflict restoring full Qatari LNG flows.
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This Bloomberg Markets video, published March 18, 2026, features Mark Cranfield, Priscilla Rocha discussing XLF, UTILITIES. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Mark Cranfield, Priscilla Rocha · Tickers: XLF, UTILITIES