Trump message urging restraint amid Middle East tensions… U.S. stocks and Treasuries fall [Morning Briefing]

◆ Trump urges restraint amid Middle East tensions… U.S. stocks and Treasuries fall

All three major U.S. stock indexes in New York closed lower on the 19th (local time). The market opened down as international crude prices rose on a string of attacks on energy facilities in the Middle East. Losses, however, narrowed as the Donald Trump administration repeatedly delivered remarks aimed at discouraging escalation and calming oil prices. The Dow Jones Industrial Average closed at 46,021.43, down 203.70 points (0.44%) from the previous session. The S&P 500 fell 18.21 points (0.27%) to 6,606.49, and the Nasdaq dropped 61.73 points (0.28%) to 22,090.69.

As tensions in the Middle East persisted, international oil prices rose. Brent crude futures for May delivery settled at $108.65, up 1.2% from the previous session, while U.S. West Texas Intermediate (WTI) crude futures for April delivery finished at $96.14, down 0.2%. Brent, the global benchmark, briefly surged to as high as $119 a barrel. With political pressure mounting due to the oil spike, the Trump administration continued to issue remarks aimed at easing tensions. President Trump said at a summit with Japanese Prime Minister Sanae Takaichi that he told Israeli Prime Minister Benjamin Netanyahu not to carry out additional attacks on Iran’s oil and gas facilities. With inflation concerns rising on higher oil prices, U.S. Treasury yields briefly jumped before ending the day slightly higher.

◆ Qatar: "Force majeure on long-term contracts with South Korea and others could be declared for up to five years"

QatarEnergy (QE), Qatar’s state-owned energy company, said on the 19th (local time) that it could declare force majeure for several years on long-term supply contracts with South Korea and others after key liquefied natural gas (LNG) facilities were hit. CEO Saad al-Kaabi told Reuters in an interview, "We may have to declare force majeure for up to five years on long-term LNG supply contracts destined for South Korea, China, Italy and Belgium."

The attack damaged 17% of LNG export capacity, and repairs are expected to take three to five years. South Korea imports 9 million to 10 million tons of LNG annually from Qatar, with 6.1 million tons per year under long-term contracts. Korea Gas Corp. said Qatar accounts for less than 20% of its supply thanks to diversification and that inventories are sufficient to manage supply and demand through year-end. However, if force majeure is actually declared, shortfalls would need to be covered in the higher-priced spot market, which would also affect household gas bills. Al-Kaabi stressed, "First and foremost, hostilities must stop in order to resume production." Iran’s attack directly damaged, among others, two of the 14 production trains, and the resulting decline in output is projected to amount to 12.8 million tons per year.

◆ Takaichi tells Trump: "Early stabilization of the Iran situation is important… U.S.-Japan communication to continue"

Japanese Prime Minister Sanae Takaichi said she explained at a summit with President Trump at the White House on the 19th that the situation involving Iran needs to be stabilized quickly. Takaichi said, "We agreed to communicate closely to ensure safe navigation in the Strait of Hormuz and stable energy supplies." Regarding Trump’s request to dispatch vessels to the Strait of Hormuz, she said she "explained in detail what Japan can and cannot do within the scope of its laws," without clearly stating whether Japan would comply. Japan’s pacifist constitution renounces the use of force, and analysts say it would be difficult for the Self-Defense Forces to operate in a combat zone. Within the Japanese government, a plan is gaining traction to send vessels under the banner of "survey and research" if the situation stabilizes.

◆ 'BTS Gwanghwamun concert' D-1… Sejong-daero traffic controls begin tonight

With BTS’s concert at Gwanghwamun Square one day away, traffic restrictions in the area will begin. Vehicle traffic will be banned on the Sejong-daero stretch between Gwanghwamun and City Hall from 9 p.m. today until 6 a.m. on the 22nd, for 33 hours. Tomorrow, Sajik-ro and Yulgok-ro will be controlled from 4 p.m. to 11 p.m., and Saemunan-ro from 7 p.m. to 11 p.m. On the day of the event, the subway will pass through Gwanghwamun Station, City Hall Station and Gyeongbokgung Station without stopping. From around 2–3 p.m., all exits will be closed, with access resuming after 10 p.m. City buses will be rerouted on 86 lines, and the central stop at Gwanghwamun Station will be passed without stopping. For pedestrian safety, operations will also be suspended at 58 Ttareungi bike-rental stations near the venue. The Seoul Metropolitan Government will begin a special crackdown on illegal parking and stopping from 9 a.m. today and plans to broadcast announcements in six languages for foreign tourists.

◆ Clear skies nationwide; wide day-night temperature swings… daytime highs up to 17°C

On Friday the 20th, the country will be mostly clear, but large day-night temperature swings will require attention to health. Daytime highs will rise to a mild 11°C to 17°C, and fine-dust levels are expected to remain in the 'good' to 'moderate' range across all regions. With large temperature swings and a possibility of frost, care is needed for crops. Waves will range from 0.5 to 2.0 m in the nearshore East Sea, with offshore swells expected to reach up to 3.5 m.

Kim Ye-rang, Hankyung.com reporter yesrang@hankyung.com