(The opinions expressed here are those of the authors.)

By Anna Szymanski

April 17 (Reuters) -

Everything Mike Dolan and the ROI team are excited to read,

watch and listen to over the weekend.

From the Editor

Hello Morning Bid readers!

If the biggest Middle East conflict in decades - complete

with the disruption of more than 600 million barrels of oil and

the largest monthly Brent crude price spike ever - couldn't deal

lasting damage to global markets, perhaps nothing can.

Wall Street has already erased the damage clocked early in the

conflict, with U.S. stocks back to pre-war levels after an

almost 10% round trip in just six weeks - a shorter ride than

the eight-week, post-Liberation Day rollercoaster last year.

That comes amid rising hopes for a conclusion to the Iran

war.

The week got off to a rocky start on that front after failed

peace talks last weekend. President Trump announced on Sunday

that the U.S. would impose a blockade on traffic to and from

Iranian ports through the Strait of Hormuz - as well as on ships

paying tolls to Iran. Trump has followed through, and oil

markets are clearly hoping this Hormuz countermove proves to be

another example of the president's "escalate to de-escalate

playbook".

The squeeze on Iran's revenue does appear to be having an

impact. A source told Reuters that Iran might let ships sail

freely through the Omani side of the strait under proposals it

has offered in talks with the U.S., providing a deal is agreed

to prevent renewed conflict.

Other signals are looking positive. Trump said talks between the

two sides could take place this weekend and that the two-week

ceasefire, set to expire next week, could be extended - if a

deal isn't agreed beforehand. Meanwhile, news also came

yesterday of a 10-day ceasefire between Israel and Lebanon.

A peace deal isn't a given, of course. That uncertainty was

reflected in markets on Thursday as oil prices rose again, with

Brent crude approaching the $100-per-barrel level, though these

gains were pared back early on Friday.

Elsewhere, macro forecasters appear to be betting that the

wounds from this conflict won't run too deep. As world leaders

met in Washington, DC this week for the International Monetary

Fund (IMF) and World Bank Spring Meetings, the IMF's reference

forecast left global GDP growth for 2027 unchanged at 3.2%.

Granted, it also cut its 2026 outlook and warned of drifting

toward an 'adverse scenario'. But for now, it's assuming a

short-lived war.

Oil futures are also fairly sanguine. While Brent crude futures

are still around 10-15% higher than before the war, the curve

indicates that long-term pain from one of the biggest energy

supply crises in history won't be severe.

However, this doesn't jibe with what is being seen in the

physical market, where prices are far higher. This disconnect is

forcing consumers, companies and policymakers to navigate

today's choppy energy environment without a reliable compass -

and that could leave a lasting scar on the global economy.

Indeed, the conflict has already caused significant damage

that won't be easily fixed.

For one thing, the Iran war and the closure of the Strait of

Hormuz have shattered a status quo that prevailed among Middle

East oil and gas producers for decades. The uneasy "new normal"

may just be setting the stage for more fighting.

Meanwhile, European holidaymakers may be forced to rethink their

plans this summer as airlines brace for possible flight

groundings amid the fuel supply crunch. A downturn in European

summer travel could take a bite out of the continent's growth,

making this crisis yet another serious wake-up call for a region

already grappling with energy security.

Stateside, Trump has signalled that gasoline prices could remain

near or above current levels of around $4 a gallon through the

U.S. midterm elections in November. That could have real

political consequences, but one industry may benefit: high

prices at the pump appear to be spurring renewed interest in

electric vehicles in the U.S.

As a reminder, oil and gas are not the only commodities being

impacted by this conflict. The Iran war is triggering an

unprecedented crisis in the global aluminium market, with

potentially devastating knock-on effects across sectors as

diverse as construction, packaging, transport and green energy.

Despite all this, what the Wall Street six-week round trip

teaches us is that markets are simply becoming more resilient to

shocks. This "escapism" - as some have called it - is

understandable, even logical, when we remember investors'

buy-the-dip tendencies, the apparent reliability of the "TACO"

trade, the AI investment boom, and earnings that seem to rarely

disappoint.

Speaking of earnings, big U.S. banks kicked off the

first-quarter reporting season this week, and results were

mostly strong. With Tesla reporting next week - the first of the

"Magnificent 7" out of the gate - focus will turn to whether the

energy price shock and supply chain woes in Asia have impacted

the outlook for the AI boom. One growing argument is that tech

companies could actually turn out to be the biggest winners from

rising geopolitical tensions.

Finally, while all eyes have been on the Middle East in the past

two months, China has quietly released a string of positive

economic data points - including hitting 5% GDP growth last

quarter. True, exports dropped last month, largely because of

the war, but there are signals that the property crisis may soon

be bottoming out. For Beijing, this couldn't come at a better

time.

What's more, China continued adding to its crude stockpile - the

world's largest - in March, even as the rest of Asia struggled

to offset the loss of Middle Eastern supply. The question now is

how quickly China will tap those reserves if the Strait of

Hormuz remains closed.

For more data-driven insights on markets and commodities, check

out Reuters Open Interest. You can learn:

* Which countries is China tapping to replace the energy

imports currently trapped in the Middle East?

* How can investors participate in what appears to be a

burgeoning commodities supercycle?

* Why should investors care about Viktor Orban's electoral

defeat in Hungary?

* How might Australia's green steel industry benefit from

the Iran war?

* Why is U.S. coal's recent reprieve likely to be a mirage?

I'd love to hear from you, so please reach out to me at .

This weekend, we're reading...

MIKE DOLAN, ROI Finance & Markets Columnist: A new paper

by Brookings Institution fellow Gian Maria Milesi-Ferretti

examines the return of global imbalances as a major world

concern. He concludes that rising current account deficits can

be benign if driven by technological investment that yields

productivity gains, but warns the deteriorating U.S. fiscal

outlook poses the biggest risk.

ANDY HOME, ROI Metals Columnist: Amanda van Dyke, founder of

the Critical Minerals Hub, offers an insight on sulfur as

another supply chain casualty of the Iran war. She argues that

despite sulfur underpinning the global economy, its increasingly

fragile supply chain is going largely unnoticed.

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist:

This article from Rystad Energy analyzes how Asian cooperation

could build energy resilience amid the current crisis, with

practical data on fuel-switching options and a clear-eyed view

of the supply challenges ahead.

We're listening to...

RON BOUSSO, ROI Energy Columnist: This BBC Americast

podcast offers an insight into U.S. Defense Secretary Pete

Hegseth and how religion has entered the Pentagon since he

took over.

And we're exploring...

GAVIN MAGUIRE, ROI Global Energy Transition Columnist: This

newly released AI platform, Iwfgara, maps wind speeds and

directions across the planet, offering detailed representations

of wind patterns worldwide. Models like these can help utilities

and power traders more accurately predict wind power flows

through electric grids.

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Opinions expressed are those of the authors. They do not reflect

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