Bullion leaps, crude slides on Iran diplomacy hopes, testing Citi's thesis
Gold rose about 3.3% and Brent fell about 9% on Iran diplomacy hopes, testing Citi's de-escalation thesis. Fed hike odds stayed near 83%.
Trump plans to meet Gulf leaders at the UN to discuss postwar Iran strategy, with a day-after plan expected after midterms.
The very framing is what matters for oil markets: talking about a postwar strategy instead of managing a wartime crisis indicates Washington sees the conflict as eventually ending, which traders would take as bearish for the geopolitical risk premium now built into crude. At the same time, Trump's own remark that the war is only "hopefully" close to ending, plus a day-after blueprint that won't be completed until after the midterms, suggests a longer timeline rather than a quick finish, so any oil price relief is likely to remain muted until a clearer plan or ceasefire structure appears. Ongoing threats to Gulf oil and gas exports remain the more pressing price factor for now, and any escalation before Tuesday's meeting could easily drown out the diplomatic signal.
--- Trump is laying groundwork for the Iran war's aftermath, beginning with a Gulf leaders gathering at the UN next week.
Summary:
President Trump is slated to meet Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to talk about next steps in the Iran conflict, three sources with direct knowledge told Axios. The session is expected to center on US proposals for a postwar approach, as Trump and his senior team craft a day-after plan that is not expected to be completed until after the midterm elections.
Per the sources, Trump will meet with leaders or foreign ministers from the six Gulf Cooperation Council countriesâSaudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman. One source said the meeting might be expanded to include other Arab and Muslim leaders. The State Department dispatched initial invitations on Wednesday, while the White House declined to comment on the plans.
Israeli Prime Minister Benjamin Netanyahu also wants to meet Trump during his New York trip, an Israeli source said, although no meeting has been arranged yet.
The timing parallels last year's UN General Assembly, when Trump met with leaders from eight Arab and Muslim countries and shared his draft Gaza peace plan. He unveiled that plan publicly a week later, and a deal to conclude that war followed shortly. The Gulf states now central to the Iran talks have a direct interest in how the conflict ends. Several host US military bases and were hit by significant Iranian attacks during the war, plus substantial economic losses from disruptions to their oil and gas exports.
Trump said on Wednesday he believes the war is hopefully nearing its close, repeating his claim that Iran wants an agreement and that the US has heard this directly from Tehran. The planned Gulf meeting suggests Washington is now turning its attention from the war's day-to-day conduct to shaping what follows, following a patternâprivate diplomacy with regional leaders before a public announcementâsimilar to the one before last year's Gaza deal.
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