WS #1708

The Strait of Hormuz crisis continues to dominate market narratives, but new data reveals a complex and evolving situation. While the previous synthesis highlighted confirmed closure and supply disruptions, recent reports indicate that about 90 ships are still crossing daily with Iran exporting oil despite the war, suggesting some transit persists. However, this is countered by data showing daily oil exports from the region have fallen by at least 60% from prewar levels due to drone/missile strikes and Iran's chokehold, maintaining significant supply pressure. The geopolitical landscape is becoming more fragmented, with Trump warning NATO to help secure the strait or face consequences, yet facing rebuffs from allies, while Russia emerges as a beneficiary through higher oil prices funding its military campaign. Market impacts are broadening beyond energy: the yen nears 160 per dollar as oil prices surge and stocks tumble, reflecting currency and equity stress, while Australia experiences petrol shortages affecting consumers, indicating real-world demand-side pressures. Notably, the fertilizer supply chain disruption (about one-third of global supply transits the strait) is gaining attention as a secondary inflationary threat to food production, compounding the crisis. Counter-signals include Trump's contradictory statements and reports of ongoing crude loadings via bypass pipelines, but these are outweighed by military escalations, with Iran having fired 3,000 projectiles targeting Gulf facilities since late February. The regime remains neutral with headline risk, but any move to actual gas/field disruption could trigger further volatility. Recent prediction outcomes show low accuracy (16.2%), with refuted calls on NVDA and expired ones on MU and EWJ, underscoring the challenging forecasting environment amid geopolitical uncertainty.