An employee looks out over oil transport pipelines on the Arabian Sea in Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia.
Simon Dawson | Bloomberg | Getty Images
Hello, this is Leonie Kidd coming to you from London.
The “illusion of abundance” is fading, and predictions of a “return to normalization” in the Strait of Hormuz any time soon would be “very, very optimistic.” This is the warning from commodity veteran Jeff Currie, as rising tensions in the Middle East send oil prices higher once again.
With U.S. investors returning from their long Labor Day weekend, the direction of trade looks set to be determined by the battle for the Strait and any incremental gains that can be made to ease this critical commodity chokepoint.
Read on for more.
What you need to know today
Crude prices have rallied back to six-week highs, with West Texas Intermediate trading above $93 a barrel and Brent crude oilย futures marching back towards the $100 a barrel mark, currently trading over $97 a barrel in early trade on Tuesday.
Saudi Aramco oil facilities were hit in fresh attacks on Monday, according to aย reportย by the Financial Times, putting oil markets on edge. The strike came after the U.S. military hit three Iranian oil tankers.
The tit-for-tat strikes have also helped drive gas prices higher.
In the U.S., gasoline prices have topped $4 per gallon, hitting a record high for Labor Day.
Canada in the crosshairs
Amid the escalating tension, Iran has taken aim at Canada for supporting U.S. action in the Strait of Hormuz.
In a post on X,ย Tehran’s Foreign Ministry spokesperson Esmaeil Baghaei said that Canada chose to “appease” the U.S. “on the very day the U.S. president, in blatant contempt for Canada’s sovereignty and independence, portrayed the entire country as part of the United States.”
Meanwhile, Canada’s new tariffs on around $20 billion worth of U.S. goods take effect on Tuesday, and Bombardier has become a battleground. The Canadian airplane manufacturer has detailed its current U.S. footprint after President Donald Trump wrote on Truth Social, “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!… If they want our Market, they must build here, and stop treating America like a ‘piggybank.'”
Shrugging shocks
Global markets continue to shrug off the geopolitical shocks, but HSBC sees some developments that could end that dynamic. Find out more here.
U.S. futures are mixed after the extended trading break for Labor Day. Across Asia, Japanese equities are under pressure as the yen holds near its strongest levels against the U.S. dollar since February.
The Mistral model
Europe’s AI darling, Mistral, has raised โฌ3 billion ($3.5 billion) in funding at a โฌ21 billion ($24 billion) valuation, with Samsung Electronics and EU-backed Scaleup Europe among the major investors. The French group is looking to position itself as a key rival to OpenAI and Anthropic. Hear from the CEO on Squawk Box Europe.
โ Leonie Kidd
And Finally…
Inside Italyโs banking M&A boom โ and why Wall Street is watching
Italy has become the center of Europe’s banking consolidation boom, with a wave of takeover bids reshaping the country’s financial sector. This video explains what is driving the dealmaking, how battles for influence over banks including Monte dei Paschi and Mediobanca connect to insurer Generali, and why the outcome could have implications for Europe’s push to build larger banks capable of competing with U.S. rivals.
โ Gaelle Legrand
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