WS #313

The dominant signal remains the escalating US-Israel-Iran conflict, now in its 13th day, with severe and immediate impacts on global energy markets and inflation. Brent crude has surged back above $100/barrel, with Iran's new supreme leader vowing to keep the Strait of Hormuz closed, a critical chokepoint for 20% of global oil. This has triggered panic-buying and fuel shortages in countries like Australia, where petrol prices exceed $2/litre and the government is releasing 762 million litres from reserves. The US has issued a licence allowing Russian oil sales through April 11 and released 172 million barrels from the Strategic Petroleum Reserve as part of a 400-million-barrel IEA effort to tame prices, but these measures have failed to cap the surge. Inflation forecasts are being revised upward, with Nomura raising India's FY27 CPI forecast to 4.5% from 3.8% due to the energy shock. The conflict is also impacting specific sectors: helium prices have doubled in two weeks due to Qatar's LNG production halt (a key helium source), affecting semiconductor and medical imaging supply chains. Additionally, Tesla has received a UK licence to supply electricity to households, expanding its energy retail push amid the crisis. Market-moving implications are clear: sustained oil prices above $100 will pressure inflation, potentially delaying Fed rate cuts and weighing on equity markets. Affected US tickers include energy-sensitive names and broad indices like SPY and QQQ, with continued volatility expected over the next 1-8 hours.