BNY’s Geoff Yu notes that Iran’s signals of continued military response alongside active mediation keep the Middle East conflict in a managed but unstable phase. This backdrop leaves Oil prices higher after recent strikes, though the survival of a diplomatic track marginally supports broader risk sentiment. Markets are watching whether diplomacy can contain escalation risks.

Managed conflict underpins crude prices

"After nine days of strikes, Iran is still signaling a military response, but it is also keeping diplomacy alive. Foreign Ministry spokesman Esmaeil Baghaei said Tehran has received proposals from mediators aimed at preventing a wider conflict and rejected the idea that Iran faces a binary choice between negotiations and war."

"Spokesman Esmaeil Baghaei said diplomatic efforts had remained active in recent days and that Iran would continue talks aimed at halting U.S. actions even as its armed forces responded militarily. He rejected the idea that Tehran faces a simple choice between negotiations and war, arguing that both diplomacy and defense serve the same national interest."

"For markets, that keeps the conflict in a managed but unstable phase. Oil is still up after the strikes, but the survival of a diplomatic track is helpful for risk sentiment at the margin."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)