Energy and Oil Sector

Oil whipsawed across two sessions as the U.S.-Iran conflict escalated and then pulled back from the brink: WTI surged 4.4% to $73.52 on Wednesday after Trump declared the ceasefire over and threatened to reimpose a naval blockade of Iran, then shed 2% to $72.08 on Thursday as Qatar and Pakistan scrambled to broker new talks (CNBC Energy). The Strait of Hormuz — the narrow waterway through which roughly 20% of global oil supply flows — saw tanker traffic slow sharply as the security threat level was raised to 'severe.' Citibank analysts told clients the market is not pricing in a full Hormuz closure, but rather a "new normal" of recurring missile skirmishes interrupted by uneasy lulls — a distinction that matters enormously for energy supply chains. Trump, characteristically, expects prices to fall quickly and told CNBC the U.S. has an "oil glut" with ships now exiting the strait — though Iran's threat to close Hormuz entirely keeps a genuine worst-case scenario on the table.

Alongside the military strikes, the U.S. Treasury Department cancelled its authorization for Iran to sell oil — a concession critics had long flagged as a major weakness in the interim ceasefire deal — removing a meaningful source of barrels from global supply at an already tense moment (CNBC Energy). Iran's oil exports, previously flowing under that waiver, now face renewed sanctions enforcement, which tightens available supply even before any physical disruption to Hormuz transit. The Treasury move landed the same week the U.S. bombed over 80 Iranian targets including anti-ship missile systems and command networks — the infrastructure Iran uses to threaten tanker traffic — suggesting Washington is pursuing a coordinated military and economic pressure campaign. For energy markets, the policy shift is a slow-burn risk distinct from the day-to-day price volatility: sanctions (legally binding trade restrictions) tend to redirect oil flows rather than eliminate them entirely, but the near-term supply picture just got meaningfully tighter.

Tanker crossings through the Strait of Hormuz — the narrow chokepoint handling roughly 20% of global oil supply — fell from a daily average of 33 to just 5 overnight Wednesday into Thursday, after Iran attacked three commercial ships and the U.S. responded with airstrikes, according to maritime intelligence firm Windward. Oil prices have rallied more than 6% this week as markets price in what analyst Andy Lipow of Lipow Oil Associates calls a 'new normal' of periodic missile skirmishes interrupted by uneasy calm — not a full closure, but not safe passage either. The ceasefire framework that briefly reopened Hormuz after Iran's initial shutdown in February has collapsed, with the U.S. reimposing Iranian oil sanctions on top of the military strikes. Windward analysts told clients this is the most significant escalation since the conflict's opening phase — which, for context, triggered the largest oil supply disruption in recorded history.