🧠 Food for thought

Implications, context, and why it matters.

Today’s market shock follows nearly two months of rising Middle East energy and shipping risks

• The latest market move stems from a crisis that started on February 28, 2026, when U.S. and Israeli forces launched an offensive against Iran 1.
• That raised the chance of disruptions in the Strait of Hormuz, the narrow link between the Persian Gulf and the open ocean that carries about 20% of traded oil worldwide and more than one-third of seaborne liquefied natural gas 1.
• By early March, oil tanker traffic at times slowed to near standstill, while Brent crude climbed into the US$90-per-barrel range 2.
• The supply risk is physical. Saudi Arabia’s East-West pipeline plus the United Arab Emirates’ Fujairah export route can move about 7 million to 8 million barrels a day, far below the roughly 15 million barrels a day that usually pass through Hormuz 1.

The oil shock is making the Federal Reserve’s rate-cut path harder to judge

• Higher energy costs are already reaching the U.S. economy, lifting consumer inflation to 3.3% in March from 2.4% in February 3.
• Markets now expect the Federal Reserve, the U.S. central bank, to keep rates steady through 2026 after earlier pricing in two cuts 3.
• Federal Reserve officials warn that a long conflict plus high energy prices could feed into core inflation, which excludes food and energy, making the outlook harder to read 4.
• That has brought back fears of stagflation, a mix of slower growth and higher inflation, which would raise recession risk if disruptions last 3.