US seizes Iranian cargo ship in Gulf of Oman

What happened: On Sunday, the U.S. seized an Iranian-flagged cargo ship, the TOUSKA, in the Gulf of Oman, following a warning to stop. President Trump announced the interception, stating the vessel was fired upon when it didn't comply. This escalation comes amidst a fragile Iran-U.S. ceasefire and ongoing tensions over the Strait of Hormuz, a vital oil chokepoint.

Market impact: The seizure disrupted oil traffic through the strait, with Kuwait declaring force majeure on crude and product shipments. Brent oil prices surged 4.8% to $94.69 per barrel, while European stock markets fell. Shipping firms expressed safety concerns, potentially impacting global energy supply chains.

What to watch next: 1. U.S.-Iran diplomatic response: Both countries' reactions to this incident will shape future diplomatic moves. 2. OPEC+ meeting on June 4: The group's decision on oil production could influence market sentiment, given the current supply disruptions. 3. Strait of Hormuz traffic: Resumption of normal traffic will indicate a de-escalation and could pressure oil prices downwards.