U.S. Initiates Withdrawal of Some Diplomats and Military Families from the Middle East; UK Issues Warnings to Vessels; Market Concerns Over Escalating Conflicts Drive Oil Prices Up More Than 4% on the 11th
(Background: Completion of U.S.-China Trade Agreement: Trump: China Will Open Rare Earths, Impose 55% Tariff, Bitcoin Surges then Drops to $108,000)
(Context: Following the Xi-Trump Hotline, a new round of U.S.-China negotiations took place in London on the 9th, focusing on tariffs and rare earth trade)
The United States and the United Kingdom have made rare synchronized adjustments to their Middle East deployments within a span of 12 hours, highlighting the dangerous atmosphere following the stagnation of nuclear negotiations with Iran. Reuters cited three U.S. officials stating that Washington has authorized the departure of non-essential diplomatic and defense personnel from Iraq and surrounding countries; the UK Maritime Trade Operations (UKMTO) has also issued a “high alert” notification to commercial vessels transiting the Arabian Gulf.
The Context of the Evacuations and Warnings
Pentagon officials revealed that the evacuation order currently covers Iraq, Kuwait, and Bahrain, allowing approximately 1,200 civilian personnel and their families to choose to return home on military aircraft. Defense Secretary Pete Hegseth emphasized in a statement, “The safety of personnel is our top priority.”
Iranian Defense Minister Aziz Nasirzadeh warned on state television:
“If negotiations collapse, our missile range is sufficient to cover all U.S. military facilities in the region.”
The U.S. and Iran are negotiating a new nuclear agreement, with the core aim of preventing Iran from acquiring nuclear weapons in exchange for the lifting of economic sanctions against Iran. President Trump reiterated that the U.S. will not allow Iran to possess nuclear weapons, regardless of whether a nuclear agreement is reached. Specific negotiation demands include Iran’s cessation of uranium enrichment activities, while the U.S. considers correspondingly lifting economic sanctions imposed on Iran. Since April of this year, with the mediation of Oman, the U.S. and Iran have held five rounds of indirect talks, but progress has been slow. Trump expressed in a recent interview that his confidence in reaching a nuclear agreement with Iran is declining…
Potential Impacts: Oil Prices, Shipping, and Geopolitics
Energy traders reacted swiftly. Bloomberg terminal data showed that Brent crude oil jumped over 4% on the 11th, reaching its highest level in more than two months, while hedge buying also pushed ICE European diesel contracts up by 3%. The International Energy Agency estimates that if maritime transport is disrupted, each day of blockage could reduce spot supply by 1.7 million barrels per day.
Markets are also closely monitoring the military ripple effects in the region. The Israel Defense Forces raised the alert level in the north to “orange” on the 6th, and Saudi Arabia reiterated its “defensive readiness.” Pierre Duval, a retired general of the French Foreign Legion and current advisor, pointed out, “Any accidental spark could pull multiple proxy battlefields into the same regional conflict.”
The U.S. government still retains diplomatic channels. A U.S. State Department official stated during a phone briefing that they are willing to “return to the negotiating table at any time,” but declined to specify a timeline. Iran, however, insists that it will only sign an agreement after sanctions are lifted.
The evacuation orders and maritime alerts indicate that the U.S. and UK assess the situation has reached a “potential military escalation” threshold; every subsequent official statement could lead to significant market volatility, urging investors to exercise caution regarding risks.
Middle Eastern Risks Heat Up; U.S. Stocks Rise Then Fall
Motivated by moderate inflation performance, U.S. stocks opened slightly higher last night across the four major indices, but subsequently fell as security risks in the Middle East escalated, closing lower:
- Dow Jones Industrial Average fell 1.1 points to close at 42,865.77.
- S&P 500 Index fell 16.57 points (0.27%) to close at 6,022.24.
- Nasdaq Index fell 99.11 points (0.5%) to close at 19,615.88.
- Philadelphia Semiconductor Index fell 9.97 points (0.19%) to close at 5,232.53.
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