Coordinated strikes on Iran led to an effective closure of the Strait of Hormuz, a corridor handling over 25% of global seaborne oil. Major shippers are rerouting vessels around Africa, and insurers are withdrawing coverage, driving a 14% jump in Brent crude and a 70% rise in European natural gas.

A prolonged blockade threatens to push oil toward $100 per barrel, intensifying headline inflation and compressing elevated P/E ratios across equity markets. With consumers accounting for roughly 68% of U.S. GDP, higher fuel and utility costs are poised to weigh on discretionary spending and broader economic growth.

Rising energy costs are shifting investor preference toward Energy and Utilities sectors while penalizing high-growth technology names sensitive to higher discount rates. Extended transit times and increased security premiums on rerouted shipments add an inflationary drag, raising the odds of a ‘high for longer’ interest rate environment.