WS #2545

The Strait of Hormuz crisis is escalating with new, direct threats from Iran's Defense Council, which warns it will mine sea lanes and disrupt Gulf routes if the U.S. executes military threats, corroborated by multiple sources including Reuters and independent reports. This heightens the risk of a prolonged oil supply shock, with the IEA head stating the energy crisis is worse than the 1970s oil shocks combined, and oil prices rising to $100.28 (up 2.09%). Concurrently, Russia's Primorsk and Ust-Luga ports have halted oil and fuel loading since March 22 due to drone attacks, adding another layer to global energy supply disruptions. Global stock markets are plunging, with the S&P 500 down 1.78%, NASDAQ down 2.28%, and Asian indices like the Nikkei down 3.48%, reflecting investor panic. Traders are pricing in Fed and BOE rate hikes due to inflationary pressures from the energy shock, with expectations of a 20 basis point Fed increase and four quarter-point BOE hikes in 2026. Safe-haven assets like gold are sliding further (down 7.76%), indicating broken traditional hedges. Specific developments include a 22-nation NATO group forming to secure the Strait, potential IEA oil reserve releases, and geopolitical tensions with China warning against force in the region. These factors could move energy stocks, broad indices, and rate-sensitive sectors in the next 1-8 hours.