U.S. and Iran tensions escalate in Strait of Hormuz

U.S. and Iran trade strikes continued for a third straight night, with President Trump saying American forces are blockading the Strait of Hormuz and proposing a 20% levy on all cargo. The escalation raises near-term supply and shipping risk for Middle East crude, likely driving higher energy-risk premia and volatility. Trump stated he remains positive about reaching a peace deal with Tehran, but the immediate actions are a clear negative risk factor for markets.

Analysis

U.S. and Iran trade strikes continued for a third straight night, with President Trump saying American forces are blockading the Strait of Hormuz and proposing a 20% levy on all cargo. The escalation raises near-term supply and shipping risk for Middle East crude, likely driving higher energy-risk premia and volatility. Trump stated he remains positive about reaching a peace deal with Tehran, but the immediate actions are a clear negative risk factor for markets.