Oil Prices Surge on Iran Tensions, Supply Concerns Mount

**Implied Volatility / Movement:** Oil prices extended their earlier climb after President Trump issued renewed threats concerning Iran, following the first exchange of fire in weeks. Brent crude was trading at $91.48 per barrel, with West Texas Intermediate at $86.97 per barrel, both up by over $1 per barrel from Monday. Trump stated the U.S. was ready to "smack" Iran if necessary.

Shipping data indicates tanker traffic in the Strait of Hormuz remains significantly below pre-conflict levels. ING commodity analysts noted that while reports suggest 6-8 million barrels per day transit the strait, they assume an average of 5 million barrels per day, with further escalation potentially pressuring these flows. ANZ analysts highlighted that global oil market buffers, including U.S. inventories nearing minimum levels and China's import capacity, are being tested as seasonal demand picks up.

## Catalyst Analysis: Geopolitical Tensions Escalate - The U.S. President issued renewed threats against Iran, increasing geopolitical risk in the energy markets. - Oil prices are up, with Brent crude at $91.48 and WTI at $86.97 per barrel, reflecting supply security concerns. ## Impact on Energy Markets ### Winners, Losers & Uncertainty - Uncertainty persists regarding the security of oil flows through the Strait of Hormuz, a critical chokepoint. - Tightening global inventories and potential demand increases add to supply side pressures. ### Risk Watch — legal/timeline; no fake EPS tables - Escalation of tensions could further pressure oil flows and market stability. - U.S. inventories are approaching minimum levels, and seasonal demand is expected to rise.