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“Doomsday” now looking increasingly plausible, analysts say, as fresh attacks further threaten oil supplies.
Iran appointed a new supreme leader: He’s the son of the recently killed supreme leader.
Trump called this his “worst case” scenario.
Rising prices could hurt Republicans in the midterms.
Coffee is up 18% since last year.
The head of Citi’s “internal hit squad” has left
THE MARKETS
S&P 500 futures were down over 1% before the open in New York as the price of oil went over $100 per barrel. The index fell 1.33% in its last session. Asian markets were a disaster: Japan’s Nikkei 225 fell 5.2%, South Korea’s KOSPI fell 5.96%. Like toppling dominoes, the U.K.’s FTSE 100 was down 1.4% in early trading and the Europe Stoxx 600 sank 1.85%. The VIX “fear index” (volatility) is through the roof.
TOP STORIES
IRAN
It’s day 10 of the war with Iran. The price of oil briefly hit $119 per barrel this morning, and stock markets fell sharply around the world as it became clear that the war would become worse before it got better:
Iran appointed Mojtaba Khamenei, the son of its recently killed leader,as its new supreme leader. He’s a hard-liner who will likely seek revenge for the death of his father.
Finance ministers from the G7 are set to meet at 8:30 a.m. New York time to discuss releasing reserves held by the International Energy Agency, according to the Financial Times. There’s only one problem with that: They have only a one-month supply.
President Trump told people not to worry. “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!” he said on social media.
Fortune’s Jason Ma reported that, when asked in the Oval Office last week for the worst-case scenario in Iran, Trump replied, “I guess the worst case would be we do this and then somebody takes over who’s as bad as the previous person, right? That could happen.” That is exactly where we are right now.
Meanwhile in Moscow: The war is having the effect of helping Russia in its conflict with Ukraine, even though Russia has been accused of supplying intel to Iran that might endanger U.S. troops. High oil prices essentially rescue Russia’s ailing oil export industry, providing Moscow with fresh foreign currency to fund its operations in Eastern Europe. The White House recently gave India a sanctions waiver allowing it to buy more oil from Russia. “This waiver constitutes an inexplicable act of material benefit to the enemy,” according to a letter sent to U.S. Treasury Secretary Scott Bessent from Democrats.
On Saturday, Trump promised to relentlessly pursue the war: “Today Iran will be hit very hard! Under serious consideration for complete destruction and certain death, because of Iran’s bad behavior, are areas and groups of people that were not considered for targeting up until this moment in time,” he said.
CHART OF THE DAY
Oil began trading above $100 a barrel today, according to data from TradingEconomics.com.
IN THE CRYSTAL BALL…
“We believe that while the conflict may support the dollar in the near term, the medium-term outlook could look far less favorable. The conflict has already pushed gasoline, diesel, and jet fuel prices higher, worsening an already delicate cost-of-living backdrop. That dynamic could hurt Republicans in May’s midterm elections and reignite a political risk premium that weighs on the greenback,” according to Antonio Ruggiero, FX & macro strategist at Convera.
“In terms of financial markets, the higher oil prices go, the more the short end of interest rate curves are repriced higher and the greater pressure builds at the long end of the bond market. A much bigger unwind remains the risk for global equity markets as higher energy prices dampen growth prospects, while higher longer-dated interest rates sap the net present value earnings of the growth stocks,” ING’s Chris Turner said.
NUMBER OF THE DAY
The rise in the price of coffee in the U.S. since January 2025, according to UBS’s Paul Donovan. “U.S. gasoline prices on Sunday were 23% above this year’s lows. The price level is not likely to disrupt GDP growth (it is below mid-2024 levels), but it will change inflation perceptions. Several high-frequency purchases have risen significantly in price since January 2025 (beef +15%, coffee +18%), and consumers tend to remember such increases. Perceptions create the U.S. affordability crisis,” he told clients this morning.
Yamini Patel, Citi’s head of investigations for the U.K., Europe, and Russia, has left the bank, according to Sarah Butcher of eFinancial Careers. Patel ran Citi Security and Investigative Services, “tasked with tackling wrongdoing at Citi,” Butcher says. “Citi’s CSIS operates as HR’s internal hit squad, highly trained to protect the firm at employees’ expense,” Citi MD Ardith Lindsey said. Although CSIS is internally unpopular because it has used employees’ testimony against them in court, colleagues say Patel “was both well-liked at Citi and very good at her job.”
