WS #2435

The Strait of Hormuz crisis has intensified with Iran issuing a direct counter-threat to the U.S., stating that any attack on its power plants will lead to a complete closure of the strait and targeting of U.S. and Israeli infrastructure. This escalation is corroborated by multiple sources including The Guardian, Bloomberg, and Europesays, heightening the risk of a broader conflict that could disrupt 10 million barrels of daily oil flow. Despite this, oil prices have shown a bearish reaction: Brent crude futures fell over $1 to a session low of $110.82/bbl, and WTI crude dropped over $1 to an intraday low of $97.20/bbl, flipping to losses in a volatile session. This suggests market fears may be shifting from supply panic to demand destruction or a temporary pullback amid the heightened geopolitical tension. U.S. stock futures initially sank but have since recovered, with S&P 500 E-minis now flat and Nasdaq futures down just 0.1%, indicating some resilience in equity markets despite the threats. However, global indices are broadly lower, with significant declines in DAX (-4.77%), FTSE (-3.76%), and NASDAQ (-2.28%), reflecting broader risk-off sentiment. Gold is wavering after its worst week in four decades, with futures at $4,574.90 and bearish sentiment persisting, potentially reducing its safe-haven appeal. The situation remains fluid, with Iran beginning to monetize control of the strait by charging passage fees, suggesting a prolonged disruption that could impact energy and shipping sectors.