Market Overview

Brent crude ripped through $95 for the first time in six weeks, up over 3% on the day, as US strikes on Iran entered an eleventh night and Houthi threats now extend to Bab el-Mandeb shipping lanes — effectively a two-front chokepoint risk for global crude flows. Goldman's desk is flagging $120 by year-end if Hormuz transit doesn't normalize, and the vol surface in oil options should already be pricing tail risk given the April spike to $126 remains fresh institutional memory. The IEA's Birol is right to note the cushioning — 400m barrels of strategic releases, Gulf states rerouting exports, Chinese demand destruction — but that's balance-sheet triage, not a structural fix, and refined products (diesel, gasoline) are tightening faster than crude itself as refinery throughput lags. Equinor's earnings — profit nearly doubling to $11.5bn — is the read-through trade: European integrated oil and gas names are the cleanest long exposure to this dislocation without direct Gulf logistics risk. Cross-asset, expect this to keep a bid under the dollar and breakevens, complicating any dovish Fed narrative just as tariff-driven inflation optics worsen.

Trump slapped 50% tariffs on most Canadian goods under Section 338 of the 1930 Trade Act — a statute so rarely used that Cato's Scott Lincicome called it the

Brent ripped 3% to $94.07 and WTI settled near $86.83 as Trump vowed to bomb Iranian bridges and power plants for any strike on Hormuz shipping, while Rubio publicly torched hopes for a near-term deal, calling Tehran unserious after it allegedly violated a memorandum within two weeks. Crude's up over 20% this month, and the vol surface is screaming right-tail risk — TD Securities flagged that Houthi threats to embargo Saudi-bound cargo through the Red Sea are compounding the Hormuz chokepoint premium, not replacing it. This is a genuine two-front supply risk now: the strait everyone models and the Red Sea reroute nobody priced. Energy equities and tanker/freight names should keep bidding on realized vol, while refiners' crack spreads face squeeze risk if Gulf loadings get disrupted on both sides simultaneously. With the U.S. now on night eleven of continuous strikes, this is no longer a headline-risk trade — it's a sustained regime shift in the geopolitical risk premium embedded in Brent's forward curve.