Hot items of the week: .

1. Strait of Hormuz closed

The global energy market faces a major threat: the Strait of Hormuz, a key checkpoint, handles 20 percent of the world’s oil and LNG. About 100 ships pass through each day, 89% of which are crude and 83% of which are LNG bound for Asia, making the region highly vulnerable. The US relies on the Straits for only 7% of its crude oil. An outage could trigger one of the biggest energy disruptions in modern history, which could have a ripple effect on global prices, supply chains and especially Asian economies, with effects that could be felt around the world. About a fifth of the planet’s energy supply depends on this narrow corridor.

Source: Voronoi, Visual Capitalist

2. If the Strait of Hormuz is closed, there may be a possible increase in oil prices.

According to Bloomberg Economics, oil prices could rise sharply because of how long the Strait of Hormuz will remain closed. Estimates point to around $105 a barrel after one month, $140 after two months, and around $165 after three months. These figures reflect the large and irreplaceable role that this corridor plays in the global oil supply chain.

Source: Bloomberg

3. Oil rose 934% during past geopolitical shocks.

Energy markets move in cycles, often triggered by geopolitical crises, which lead to persistent increases in oil prices. Historical patterns show large increases: Gulf War 1990 (+75%), Asian Crisis Recovery 1998-2000 (+205%), Commodity Supercycle of 2000 (+592%), Post-Financial Crisis Recovery (+235%), and COVID/94%3 shocks (+3). Today, the US/Israel-Iran conflict in 2026 has already increased the price of oil by 95%. Prices react quickly because some regions control most exports, and tensions near key checkpoints such as the Strait of Hormuz force immediate repricing. Geopolitical shocks in these key areas ripple directly through global energy.

Source: Jack Prandelli on X, Leverage Shares

4. The IEA has proposed the largest release of oil reserves in its history.

The International Energy Agency has proposed releasing about 400 million barrels from the Strategic Oil Reserves to counter price spikes caused by the US/Israel-Iran conflict. This would surpass the previous record intervention of 182 million barrels released after Russia’s invasion of Ukraine in 2022. However, the math shows that this may not be enough. The G7 countries have about 1.1 billion barrels of reserves, including about 450 million in the US. Before the conflict, about 20 million barrels per day passed through the Strait of Hormuz. Flow today is close to zero, creating a potential supply gap of 18-20 mb/d. Even if 400 million barrels were released over six months, that would add only 2.2 mb/d to the market. This will cover only a small part of the disturbance. Strategic reserves can moderate price increases, but they cannot replace lost supply on this scale.

Source: WSJ, Bloomberg – Joumanna Bercetche

5. US vs. EU Natural Gas Prices—A Sharp Divergence

Markets are much more regional than oil markets, and this dynamic is on full display in current prices. US natural gas prices are down year-over-year, while European prices have nearly doubled, a clear example of Europe’s heavy reliance on imported supplies.

Source: Blackrock

6. Rising redemption pressures in US private credit

The return on US private credit is accelerating. Cliffwater capped the redemption at 7% after investors requested 14%. Morgan Stanley set withdrawal limits of up to 5 percent from its North Haven private income fund, and BlackRock imposed limits when requests reached 9.3 percent. At the same time, JPMorgan Chase is flagging software-linked loans and tightening lending standards, citing concerns about credit quality, asset values, and AI-driven market disruption. FS KKR Capital Corp. and Hercules Capital Inc. With both declining, publicly traded business development companies are also under pressure. Overall, both private and public credit markets are showing signs of stress, highlighting investor caution and growing concerns over risk.

Source: Financial Times

7. The increase in the US national debt since 1981

Every US president since Jimmy Carter has promised to rein in government spending and reduce the federal deficit. Carter warned in 1978 that the government could not keep spending more than it collected. Ronald Reagan in 1981 spoke of decades of accumulated deficits mortgaging the nation’s future. George Bush Sr. called for the deficit to be brought under control in 1989. Bill Clinton promised to restore the financial system in 1993. In 2001, George Bush Jr. pledged to pay down a large portion of the national debt. Barack Obama argued in 2010 that the federal government should tighten its belt, as American families are doing. Donald Trump pledged in 2016 to balance the budget and reduce the debt. Joe Biden claimed in 2022 that his plan would reduce the deficit. And President Trump once again promised to balance the federal budget in 2024.

Source: Charlie Bellow