For six months, the Strait of Hormuz, through which roughly 20% of global oil and liquefied natural gas trade passes, has been blocked by Iran, leaving energy markets in a state of perpetual anxiety. The United States is applying maximum economic pressure on Tehran rather than pursuing a diplomatic track, betting that Iran’s deteriorating financial situation will eventually force concessions. Brent crude is trading around $84 per barrel while West Texas Intermediate hovers between $78 and $80, with volatility driven by geopolitical news cycles. The Trump administration faces mounting political pressure ahead of midterm elections, with polls showing limited support for the ongoing conflict even among Republican voters. Investors must navigate an asymmetric risk: a potential deal would send prices tumbling, while further escalation or continued stalemate would keep prices elevated and feed into domestic inflation.
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