WS #2467

The Strait of Hormuz crisis is intensifying with immediate market-moving developments. Saudi Aramco has severely restricted April 2026 crude oil supply to Asia, directing buyers to collect only Arab Light grade from the Red Sea port of Yanbu due to the Strait closure, directly impacting global oil flows and confirming earlier supply disruption warnings. This operational shift corroborates previous signals of a 20% drop in global oil supplies, sustaining upward pressure on energy prices and affecting oil-dependent sectors. Geopolitical tensions are escalating rapidly, with President Trump issuing a 48-hour ultimatum to Iran to reopen the Strait, threatening to 'obliterate' Iranian power plants if not complied with. Iran has responded by threatening to 'completely close' the Strait immediately if the U.S. follows through, creating a high-stakes standoff. Concurrently, Trump and UK Prime Minister Starmer have agreed the Strait must reopen, indicating diplomatic efforts but with immediate impacts uncertain. These developments are driving market volatility, with Brent crude reported up 50% since February 28 to approximately $110. Asian markets are showing divergent sector reactions to the crisis. China's CSI Energy and Coal indices are set to open higher (1% and 2% respectively), reflecting bullish sentiment in energy sectors, while CSI SSH Gold Equity Index is set to open down 5%, CSI SWS Non-Ferrous Metal Index down 3%, and Hong Kong's Hang Seng Tech Index down 1.9%, signaling bearish impacts on precious metals, raw materials, and technology due to supply chain vulnerabilities. KOSPI has deepened its decline to 6%, indicating broader market pressure in the region. Global market indices show significant declines: SPX down 1.78%, NASDAQ down 2.28%, DAX down 4.77%, NIKKEI down 3.92%, with gold falling to $4,340 (lowest this year) and oil at $98.34. The crisis is also creating a food crisis risk as growers face soaring fertiliser and fuel costs, with the Strait closure hitting supply chains. These developments collectively point to sustained energy price spikes, inflationary risks, and sector-specific volatility in the near term.