Trump hails Iran deal but conflict continues to cast long shadow over global economy

Hailing his Iran deal this week amid the excess of Versailles, Donald Trump urged sceptics to take Wall Street’s word for its success. “There is nothing as smart as the market – and the market loves it,” he said, claiming credit for ending the economic chaos that had kicked off when he started bombing Iran in late February. Without the agreement, he said, “the alternative would be a worldwide depression”. By the weekend, the outlook was less optimistic after planned US-Iran peace talks in Switzerland were abruptly called off , then reinstated, and Iran said Israeli bombing in Jordan meant it was justified in closing the strait of Hormuz again. Still, hopes persist that the sea passage carrying about 20% of the world’s oil supplies will reopen fully in the coming days and weeks. If the oil does start to flow more freely again, it should forestall the shortages of key products, such as jet fuel, that some analysts had predicted would occur if the war persisted. Energy markets are already anticipating the hoped-for resurgence in supply: the cost of a barrel of crude oil dropped below $80 a barrel after the agreement was announced, for the first time since the early days of the war. Yet governments are still counting the economic costs of a war they did not want any part of. The severity of the impact varies by region. …