The Strait of Hormuz situation looked like it was starting to move in the right direction. Shipping data showed traffic rebounding to the highest level since the war began (still far below average pre-war volumes), with trapped crude starting to move and analysts talking about normalization by the end of July. That would have been a major macro relief valve.
Then the reports on damage to U.S. bases in the Gulf added a very different signal. And Trump’s comments this morning add to the confusion. Hormuz matters because roughly 20% of the world’s oil normally moves through it. IMF and other data have shown how severe the disruption has been, with oil, LNG, fertilizer, shipping insurance, and regional infrastructure all caught in the blast radius.