Oil Surges as the Market Starts Pricing in a Real Supply Shock
🛢️ Brent settled around $112.57 per barrel on March 27, while WTI closed at $99.64, marking a sharp rebound from late February. This move suggests the market is no longer treating the situation as just a short-term emotional reaction to the conflict.
🌍 The main focus is now Hormuz, where global energy flows are facing severe disruption. Once the risk shifted from pure geopolitics to the possibility of a real physical supply shortage, oil prices were quickly pulled into a much higher range.
📈 The impact is spreading across multiple asset classes as inflation pressure returns, especially for Asian and European economies that rely heavily on energy imports. Oil producers may benefit in the short term, but the broader rate backdrop and growth outlook are facing added pressure.
⚠️ In the near term, oil is likely to stay elevated if Hormuz remains materially blocked. On the other hand, any credible ceasefire signal or meaningful diplomatic progress could cool the current rally quite quickly.