Market Report.
🚢 The U.S. military has begun a blockade of Iran’s ports, further disrupting global oil supply amid the ongoing conflict. However, markets were buoyed by hopes of a potential resolution between the U.S. and Iran, despite the collapse of recent peace talks.
📰 Reuters sources indicate that dialogue is still ongoing between the two sides, and a U.S. official said there is forward motion towards an agreement. President Trump also stated that Iran wants to make a deal, though he would not accept any agreement that allows Iran to have a nuclear weapon.
📈 This news of continued negotiations was enough to spark a rebound in global stocks, with shares in Asia, the U.S., and Europe all rising. Oil prices also slipped back below $100 per barrel.
❓ But what is exactly the situation in Ormuz?
⚓ The blockade annunced by Trump would aim to halt all ships entering or leaving Iranian ports and coastal areas, effectively cutting off Iran’s oil exports. This threatens to deepen an already unprecedented crisis in one of the world’s most important energy-producing regions.
🔍 The exact implementation of the blockade is unclear, but it would likely involve inspecting and potentially seizing ships with links to Iran, similar to actions taken against Venezuela.
💰 The blockade is intended to cut off a vital financial lifeline for Iran by severing its oil exports, which have provided a source of revenue despite U.S. and Israeli strikes. However, enforcing such a blockade carries significant risks.
🌏 The blockade threatens to further disrupt energy supplies to major Asian importers, who have already borne the brunt of the crisis, and could invalidate recent waivers allowing some Iranian oil purchases.
🇨🇳 China issues a brief warning: “expects other countries not to interfere”
🚢 China issued a pointed message amid tensions over the Strait of Hormuz, stating that Chinese vessels continue to transit the waterway under existing trade and energy agreements with Iran. Beijing said it intends to honor those agreements and expects other countries not to interfere in its affairs, adding that Iran controls the strait and has permitted Chinese ships to pass.
🎖️ CENTCOM (US Central Command): The action is “impartial” and applies to vessels of all nations heading to Iranian ports. Humanitarian shipments (food, medicine) are allowed after inspection.
🇮🇷 In response, Iran denounced the blockade as “illegal” and described it as an “act of piracy,” while warning of potential retaliation against U.S. naval forces and neighboring Gulf ports. The Islamic Revolutionary Guard Corps also cautioned military vessels to steer clear of the area, signaling heightened tensions in the strategic waterway
🚫 Iran’s military has announced what it describes as a sweeping counter‑blockade affecting ports across the Middle East, declaring that no vessels will be permitted to use them while the measure remains in force. Tehran said the restrictions will continue until the U.S. blockade on Iran is lifted, marking a significant escalation in the standoff.
🚢 Over the past 48 hours, between 15 and 20 vessels have passed through the Strait of Hormuz with Iran’s authorisation. According to reports, most of these vessels belong to or are linked to China, Russia or Pakistan – countries that also possess nuclear capabilities – against a backdrop of growing tension in the region.
❓ But is the US blockade effective?
📰 According to Al-Jazeera, despite the U.S. naval blockade of the Strait of Hormuz, at least one Chinese tanker that has been sanctioned by the U.S. has managed to pass through the strait and exit the Persian Gulf.
⛴️ The tanker, identified as Rich Starry, was the first to make it through the strait since the blockade began. The tanker and its owner, Shanghai Xuanrun Shipping Co Ltd, were previously sanctioned by the U.S. for dealings with Iran.
🛢️ Another U.S.-sanctioned tanker, Murlikishan, is also heading into the strait and is expected to load crude oil in Iraq on April 16th. This tanker has previously transported Russian and Iranian oil.
🌍 The situation highlights the complexities involved in enforcing such a blockade and the potential for continued disruptions to global energy flows through the Strait of Hormuz.
📰 The Wall Street Journal reports that, Saudi Arabia is quietly but firmly pushing Washington to scale back or end the new U.S. naval blockade of the Strait of Hormuz. Riyadh fears that Iran will retaliate by targeting other critical chokepoints like Bab al-Mandeb in the Red Sea, which could disrupt Saudi and wider Gulf energy flows and trade.
🌊 Bab al-Mandeb risk: If Iran cannot effectively use the Strait of Hormuz, it may try to retaliate by threatening Bab al-Mandeb, which handles Saudi and other Gulf exports heading to Europe and beyond. A significant portion of Saudi crude still relies on the Red Sea and Bab al-Mandeb remaining open, as Saudi cannot fully bypass these maritime chokepoints even with pipelines.
⚠️ The potential for dual chokepoint disruption (Hormuz and Bab al-Mandeb) would be a nightmare scenario for physical crude flows and freight rates.
🤝 These effors by Saudi Arabia contrasts with the more hawkish stance of the UAE, which is actively lobbying for a multinational effort to forcibly reopen or secure the Strait of Hormuz.
🗣️ Iran said that it is willing to continue negotiating.
⚛️ The weekend US-Iran peace talks in Pakistan broke down primarily over the issue of Iran’s nuclear enrichment program. The US initially demanded a permanent halt to enrichment, while Iran pushed for a deal allowing a civilian nuclear program.
🔄 In the latest negotiations, the US has softened its position, now demanding Iran halt enrichment for 20 years, down from a permanent halt. Iran countered with a proposal to halt enrichment for less than 10 years.
🕊️ All parties still believe a deal is possible, with the mediators hoping to enable another round of negotiations by narrowing the differences, particularly over Iran’s stockpile of 60% enriched uranium.
⚠️ Iran has accused the US of making “excessive demands” and changing its position late in the process, leading to the collapse of the Islamabad talks. The US has threatened a potential military raid to seize Iran’s enriched uranium stockpile.
⏳ The countdown continues: 9 days left and the ceasefire expires on 21 April. Pakistan, Egypt, and Turkey are trying to close the gap before the window runs out. Egypt would be moving to meet with Rubio in Washington; Turkey is proposing an extension of 45 to 60 days.
🛑 NATO allies continue to reject Trump’s war.
🇬🇧 NATO allies, including Britain and France, have said they will not participate in the U.S. President Donald Trump’s plan to blockade Iranian ports. Instead, they are proposing to intervene only once the fighting ends.
😠 This move is likely to anger Trump and increase strains within the NATO alliance. NATO Secretary General Mark Rutte has told European governments that Trump wants concrete commitments in the near future to help secure the Strait of Hormuz.
📢 Trump had issued an ultimatum for the allies to present military deployment measures in the region.
🇫🇷 France is organizing a conference with Britain and other countries to create a multinational mission to restore navigation in the strait. This would be a “strictly defensive mission, distinct from the belligerents” and aimed at establishing rules for safe passage and coordinating military vessel escorts.
📉 IEA: the largest oil supply disruption in the history.
🛢️ The ongoing war in Iran is causing the largest supply disruption in the history of the global oil market, according to the International Energy Agency (IEA).
🚧 The conflict has led to a 90% reduction in oil flows through the critical Strait of Hormuz, which typically handles 20 million barrels of crude and products per day.
📊 Global oil supply is estimated to be cut by 8 million barrels per day this month due to the crisis, representing 7.5% of global supply and an even bigger share of exports.
📉 The IEA has cut its forecast for global oil demand growth in 2026 by 25% to 640,000 barrels per day, the lowest since last April, due to the impact on prices, flights, and economic uncertainty.
🏦 To try to calm the market, the IEA’s member countries have agreed to release an unprecedented 400 million barrels from their emergency reserves, with the U.S. contributing 172 million barrels from its Strategic Petroleum Reserve.
💼 Meanwhile, in the corporate world, we have a week of results.
🏦 The earnings reported by banks may already reflect a positive impact from the current crisis. The rise in costs resulting from higher oil prices and the associated inflationary shock could boost banks’ revenues, through increased deposits and higher interest income on loans.
📈 Even a modest delay in Fed cuts keeps rates elevated supports net interest margins for the big banks reporting this week and beyond.
📜 Past oil shocks (1970s, 1990, 2008, 2022) often led to sticky inflation and delayed easing, this is good for bank margins in the short-to-medium term.
🏛️ However, Fed treats oil as transitory. But from 2021 to 2022, with inflation soaring to decade highs, the Fed also said it was transitory, and ended raising rates rapidly. Most Wall Street forecasts still see eventual cuts in H2 2026, not new hikes.
💻 The advantage of the technology sector on Wall Street is being eroded. The bonuses of this sector over the SP500 are being reduced.
📊 The tech sector, which is expected to drive nearly 80% of the projected $74 billion in Q1 earnings growth, is particularly vulnerable to higher energy costs and rising interest rates.
Market View.
🛢️ Oil prices are easing again amid expectations that negotiations between Iran and the United States may continue. Spot Brent crude has fallen back below $100 per barrel, currently trading around $98.75.
📈 Equity markets are responding positively. S&P 500 futures have finally moved decisively away from support, climbing to approximately 6,925. Nasdaq 100 futures are showing a similar reaction, pushing above 25,500.
💵 The US dollar is weakening sharply, breaking below key support levels and falling under 98.50 on the DXY, now trading at 98.18. As a result, EUR/USD is advancing towards 1.1800, currently trading near 1.1790.
🇪🇺 In Europe, markets remain in positive territory, though without the same level of enthusiasm seen on Wall Street. DAX 40 futures are holding above 24,000, while Euro Stoxx 50 futures are trading above 5,880.
🥇 Gold futures are also moving higher, surpassing $4,800 per ounce, benefiting from the weaker dollar.
₿ Meanwhile, Bitcoin is rallying strongly and approaching the highs reached over the past month near $76,000, currently trading around $74,650.
