WS #12445

The US-Iran conflict continues to escalate sharply, with Iran's Revolutionary Guards claiming two oil tankers were blown up by mines in the Strait of Hormuz and warning the route is unsafe. A vessel is on fire in the strait, and Iran launched a new wave of missiles and drones targeting Bahrain, Jordan, Kuwait, and Iraq. Brent crude has broken above $90/barrel, up ~3%, and WTI is above $84.50. The US conducted a ninth consecutive night of strikes, and a 17th US service member has been killed. This is a clear escalation of the prior narrative. Separately, China's state-backed investors bought ~$8.9B in stocks to stem a market rout, and the CSRC will meet Monday to discuss stability. Chinese indices are set to open higher, with the STAR 50 up ~3%. The dominant theme is ESCALATING US-Iran conflict with oil and defense stocks benefiting, while airlines and consumer stocks face headwinds. The Strait of Hormuz disruption is now directly impacting oil tankers, raising the risk premium further.