Market Report.
🇺🇸 President Donald Trump said Thursday that Israel and Lebanon have agreed to extend their ceasefire by three weeks following a meeting at the White House with senior officials. “The meeting went very well!” Trump wrote on Truth Social, adding that the United States would work with Lebanon to help it protect itself from Hezbollah, the Iran‑backed militia group.
⚠️ At the same time, tensions elsewhere in the region continued to escalate, with both Iran and the United States seizing vessels. Trump also said he had ordered the U.S. Navy “to shoot and kill any boat” found laying mines in the Strait of Hormuz, underscoring the fragile and volatile security environment.
🛡️ Israeli Defense Minister Israel Katz announced that Israel is preparing to renew military operations against Iran, stating the IDF is prepared for both defensive and offensive capabilities with predetermined targets identified for potential strikes.
🚢 Business in the Strait of Ormuz.
💰 Iran announced for the first time on Thursday that initial toll payments from ships traversing the Strait of Hormuz have been successfully transferred to the Central Bank of Iran (CBI), marking implementation of Tehran’s newly codified toll collection system despite Trump administration opposition.
❌ President Trump repeatedly rejected the possibility of Iran collecting tolls, stating “Nope. No way. No. Nope” when asked about Tehran imposing fees reportedly ranging from $2 million or higher per vessel passage through the strategically critical waterway.
🤝 Trump previously suggested a potential “joint venture” arrangement between Washington and Tehran for Hormuz strait management, describing it as “a way of securing it” and “a beautiful thing,” indicating openness to negotiated toll-sharing schemes rather than unilateral Iranian collection.
📜 Iran formally codified its toll system through the “Strait of Hormuz Management Plan,” passed by parliament on March 30-31, establishing IRGC authority to charge up to $2 million per vessel with fees approximately $1 per barrel of crude cargo for fully loaded supertankers.
🛰️ Reports indicate several Iranian tankers with disabled transponders successfully navigated past U.S. Navy blockades, which the Pentagon has denied.
🌍 Unprecedented global shock: The ZeroHedge blog has echoed a report by JP Morgan commodities analyst Natasha Kaneva.
📉 Latest analysis reveals inventory draws (4.0 mbd March, 7.1 mbd April) plus reported demand destruction (~2.8 mbd March, ~4.3 mbd April) do not fully reconcile with ~9–14 mbd supply hit, indicating hidden product draws and stranded OPEC+ spare capacity masking deeper structural deficit.
⛽ U.S. shale response capacity remains limited at only 0.3–0.7 mbd ramp possible within 3–6 months, insufficient to offset sustained Hormuz closure and Iranian export collapse, leaving system burning through buffers under stress rather than achieving gentle rebalancing through supply additions.
📦 Global inventories approach “operational minimum” (~842 million barrels or 27–30 days forward cover) by late April/early May 2026, after which refining and logistics infrastructure begins breaking down, triggering cascading supply chain failures across energy sector.
🌊 The Hormuz blockade represents “the first time in written history” the strait has been fully halted for commercial traffic, with ~20% of global oil trade normally transiting the waterway, creating unprecedented supply shock with no historical precedent for recovery timeline or market response patterns.
🌎 Emerging markets would absorb initial impact before pain migrates to Europe/U.S. via higher prices.
✈️ The kerosene crisis and the airlines.
🛢️ Global kerosene supplies have fallen by more than 50% from the peaks recorded in 2025, with a drop of around 40% in the last month alone. This is not only due to shortages caused by the closure of the Strait of Hormuz, but also to stockpiling for military operations.
🏭 Chinese industry is starting to feel the impact of energy shortages:
📈 China’s factory-gate producer prices rose in March for the first time in over three years, driven by energy shocks including the LNG shortage and electricity price spikes.
⚡ Guangdong, China’s factory hub and manufacturing powerhouse, experienced electricity prices nearly doubling with spot rates hitting ~680 yuan ($100) per megawatt-hour on April 14—a three-year high—up from ~350 yuan average the prior month, driven by natural gas supply constraints from Middle East disruptions.
🚢 The price surge is directly linked to Hormuz blockade choking off Persian Gulf natural gas shipments, particularly Qatar LNG exports which represent China’s key supplier, with force majeure declarations on contracts reducing available supply for gas-fired power plants serving Guangdong’s industrial base.
📉 China’s April 2026 LNG imports collapsed to 3.36 million tons—the lowest since 2018 and far below winter peaks—reflecting the Hormuz blockade’s impact on Qatar’s ability to export LNG cargoes that must transit the strait, creating cascading supply shortage across Asian markets.
🧭 Asymmetric leverage beyond oil.
🌐 Iran’s Tasnim News Agency (IRGC-linked outlet) published a detailed map on April 22, 2026, identifying at least seven major submarine fiber-optic cables passing through or near the Strait of Hormuz, highlighting their routes and framing them as critical chokepoints for Gulf Arab digital infrastructure and strategic vulnerabilities.
💻 The Iranian report emphasized that southern Gulf states (UAE, Qatar, Bahrain, Kuwait, Saudi Arabia) rely far more heavily on maritime internet cable routes than Iran does, creating asymmetric vulnerability where Gulf economies face disproportionate digital disruption risks from cable damage or deliberate sabotage.
📡 Approximately 97 percent of global internet traffic travels via undersea cables, a standard industry statistic cited as 95–99% depending on source, with virtually all intercontinental data including e-commerce, cloud services, banking, and communications dependent on submarine cable infrastructure for transmission.
⚠️ Tasnim warned that simultaneous damage to several major cables could cause “severe outages,” “digital disaster,” banking and stock-market chaos in Dubai and Doha, e-commerce halts, and aviation disruptions across the Persian Gulf, creating cascading economic consequences for regional financial systems.
💼 The Gulf Cooperation Council’s digital economy represents directionally significant value, with estimates suggesting over $1.8 trillion in economic value at risk through finance, trading, e-commerce, and cloud services. Cable cutting can be accomplished cheaply through methods like anchor dragging, while repairs typically require weeks to months.
🏦 Swiss National Bank warns of the risks of stagflation.
📊 Swiss National Bank Chairman Martin Schlegel warned that prolonged conflict-driven energy price pressures could simultaneously fuel inflation and weigh on economic growth, creating stagflation risk if the Middle East conflict persists and energy prices remain elevated for extended periods.
📉 If energy prices normalize quickly, inflation and growth impacts would likely prove temporary and manageable for central banks to look through; however, prolonged high prices would create significantly greater economic effects requiring policy intervention and demand management.
🛒 Energy comprises smaller proportion of Swiss household spending compared to many countries, but Schlegel cautioned policymakers against underestimating wider indirect effects of higher oil prices embedded throughout supply chains and production processes.
📦 Energy costs indirectly embedded in many goods including food production, transport, and packaging, meaning energy price shocks transmit broadly through economy beyond direct household heating and fuel expenses.
🌎 Canada and China over other partners: US and Europe.
🇨🇦 Former Canadian PM Trudeau stated U.S. and European economic coercion “almost drove” Canada “into China’s arms,” citing Bombardier aircraft manufacturer case where Chinese investors offered “dump truck full of money” to acquire the company after Boeing and Airbus blocked its commercial jet sales.
🤝 Trudeau personally intervened at 2017 G7 Summit in Sicily, warning Macron, Merkel, and Trump that Western economic pressure was driving Canada toward Chinese partnerships; Airbus subsequently took majority stake in Bombardier in 2018 and acquired remaining stake in 2020, securing 3,300+ Quebec jobs.
🚗 Trudeau warned Trump’s tariff threats have “similar” coercive effect, forcing Canada’s automotive industry to consider working with China because “American industry doesn’t want to work with us anymore”.
🌐 Canada’s current PM Mark Carney declared “rupture” in American-led world order, advocating “microlateralism” where small groups of countries identify shared interests rather than relying on large multilateral organizations, representing strategic pivot toward coalition-building among middle powers.
📅 U.S.-Mexico-Canada trade agreement faces formal review by July 1 with slow negotiation pace raising concerns about addressing all issues by deadline; Trump warned of 100% duties on Canada if Ottawa strikes deals with China, creating coercive trade negotiation environment.
🏙️ Taxes on the rich in NY?
💸 NYC Mayor Zohran Mamdani unveiled the city’s first-ever pied-à-terre tax, an annual fee on luxury properties whose owners do not reside in NYC full-time, with the announcement video filmed outside 220 Central Park South where Citadel’s Ken Griffin owns a $238 million four-floor penthouse purchased in 2019.
🏗️ Citadel COO Gerald Beeson sent an internal memo Thursday indicating the firm’s $6 billion redevelopment project at 350 Park Avenue—generating 6,000 construction jobs and 15,000+ permanent jobs—might be halted due to the mayor’s perceived hostility toward wealthy business leaders and investors.
Market View.
📉 S&P 500 futures remain stuck below the 7,180 level, yet continue to hold steadily above 7,100, reflecting the indecision among investors amid the ongoing situation in the Middle East. E‑mini S&P 500 futures are currently trading near 7,150.
📈 Nasdaq 100 futures are showing slightly more optimism, trading just above 27,000.
💵 The US dollar index (DXY) has continued to strengthen and is now approaching the 99 level, currently trading at 99.85. This is weighing on major currency pairs such as EUR/USD, which has fallen below 1.1700 and is trading around 1.1685.
🇪🇺 In Europe, indices remain below the levels reached last Friday, lagging behind their US counterparts. DAX 40 futures are trading at approximately 24,325, while Euro Stoxx 50 futures are hovering around 5,815, struggling to build momentum above the 5,800 level.
🛢️ Spot oil prices surged again, with Brent crude climbing above $105 per barrel. However, prices have retreated following Donald Trump’s announcement of a three‑week truce between Israel and Hezbollah in Lebanon. Brent is currently trading at $99.55.
🥇 Gold futures have broken below key levels, moving away from the $4,800 support and falling under $4,700, reflecting a strongly bearish tone. Gold has shown notable weakness during the Iran conflict, and this latest move does not suggest renewed optimism regarding regional stability.
₿ After reaching a high of $79,500, Bitcoin has consolidated around the $78,000 level over the past day, establishing a significant short‑term support zone in that area.
