WS #2259

The Strait of Hormuz crisis has escalated to a critical level, with multiple sources confirming its effective closure and severe disruptions to global trade. A Defense Intelligence assessment indicates Iran could keep the strait closed for 1-6 months, creating sustained supply shocks. This is corroborated by reports of 21 attacks confirmed and 170 containerships trapped in the Persian Gulf, with oil and LNG markets facing sharp supply shocks. Concurrently, the U.S. has lifted sanctions on millions of barrels of Iranian oil to curb soaring gas prices, creating a countervailing bearish pressure on energy markets. Trump's comments that the U.S. 'doesn't need' the strait and should leave it to Japan and China to resolve, along with his criticism of countries refusing to help open it, adds geopolitical uncertainty. The UN's offer to help protect the strait provides a potential de-escalation mechanism, but its effectiveness remains uncertain. Market impacts include United Airlines preparing for oil to hit $175/barrel and not returning to $100 until end of 2027, while Middle East oil shocks are sparking global airfare increases with 9% increases feared. Bitcoin weakness deepens as war pushes traders to cut risk in both crypto and stocks.