WS #2517

The US-Iran conflict over the Strait of Hormuz has escalated further, with President Trump issuing a 48-hour ultimatum for Iran to fully reopen the strait, threatening to strike Iranian power plants if not complied with. Iran has retaliated by warning it will target Gulf energy and water infrastructure, including desalination plants critical for drinking water, if attacked. This tit-for-tat threatens to exacerbate the energy crisis, with the International Energy Agency (IEA) chief warning of a severe crisis combining oil and gas disruptions, potentially leading to oil prices reaching $180 per barrel. The Strait of Hormuz closure is confirmed by multiple sources including Punjabi Tribune and GDELT, impacting global oil supply and driving Asian markets lower. Indian stock markets tumbled sharply, with Sensex down over 1,500 points, due to war fears and rising oil prices. Gold prices continue to decline, nearing $4,500, amid bearish signals from higher US real yields and dollar strength, while silver also drops. In energy, ADNOC Gas is adjusting LNG production due to maritime traffic disruptions, and Indian oil companies are considering smaller 10 kg LPG cylinders to manage supply shortages from the Hormuz closure. These developments signal heightened geopolitical risk, inflationary pressures, and potential equity market volatility, particularly affecting energy, transportation, and broader indices.