Hormuz squeeze lifts risk
The Strait of Hormuz disruption is pushing oil and LNG prices higher and forcing central banks toward firmer policy — a direct shock to inflation and EM risk sentiment that’s boosting the dollar and pinching energy‑sensitive currencies like AUD, CAD and NOK. (x.com) Civil wars in Sudan and Myanmar are adding commodity and forex friction that deepens emerging‑market stress, and analysts warn further escalation could trigger renewed risk‑off flows into safe havens. (x.com) (x.com)
Brent front-month futures traded around $107–108 per barrel on March 31, 2026, marking a roughly 38% month‑on‑month jump as the Hormuz shock repriced seaborne crude risk. (tradingeconomics.com) U.S. WTI front‑month futures climbed above $102 in late‑March, a month‑to‑date gain of about 43% that reflected a war premium after the Strait of Hormuz was effectively closed to commercial tankers. (arbatcapital.com) Wood Mackenzie estimates the Hormuz shutdown removed about 1.5 million tonnes of LNG per week (≈2.2 bcm), equal to roughly 19% of global LNG exports, and says Asian spot cargoes surged above $20/MMBtu as buyers scramble for replacements. (woodmac.com) Rystad Energy’s base‑case moved Asian spot LNG to about $14/MMBtu for 2026 while warning a six‑month Strait closure could push spot LNG nearer $30/MMBtu in a severe scenario. (invezz.com) The Reserve Bank of Australia raised its cash rate to 4.10% on March 17, 2026 in a split 5–4 vote, explicitly citing higher energy costs as a risk to inflation; ECB President Christine Lagarde has said even a “not‑too‑persistent” energy‑driven overshoot may warrant tightening. (rba.gov.au) (reuters.com) Federal Reserve Chair Jerome Powell told a Harvard class on March 30 that inflation expectations remain “well anchored” and the Fed does not need to hike immediately for the oil shock, while markets sharply scaled back near‑term rate‑hike odds after his remarks. (cnbc.com) The U.S. dollar index held above 100 through late March and the greenback was up roughly 2% on the month as investors sought safe havens, while foreigners have sold about $52 billion of Asian stocks since the Iran war began, signalling heavy EM capital outflows. (tradingeconomics.com) (bloomberg.com) Sudan’s conflict has turned gold into a primary revenue source — analysts report ~37 tonnes and over $900 million in gold export receipts in H1 2026 and say control of mines is funding warring parties — and Myanmar’s sanctioned timber and illicit jade markets (estimated at ~$31 billion a year) continue to channel foreign currency and deepen local FX stress. (tradefinanceglobal.com) (alma-risk.com) (forest-trends.org) (globalinitiative.net) Carriers have suspended Hormuz transits and about 170 containerships (≈450,000 TEU) were reported trapped inside the strait, forcing 10–14 day reroutes around the Cape of Good Hope and magnifying the supply shock; Bloomberg and other analysts warn a prolonged closure could lift extreme oil‑price scenarios (some models show tail risks toward $200/bbl) and trigger further risk‑off flows into Treasuries and gold. (lloydslist.com) (bloomberg.com)
