Hormuz Is the New VIX: Iran Threatens to Shut the World's Oil Valve and Markets Are Sweating

Let's set the scene: Iran's Revolutionary Guards are threatening to completely close the Strait of Hormuz — you know, the narrow chokepoint that handles roughly 20% of global oil supply — if Trump follows through on his threats against Iranian energy infrastructure. Treasury Secretary Bessent helpfully chimed in that the US has 'plenty' of funds for a war. Comforting stuff.

Markets are reacting exactly how you'd expect. Oil is whipsawing as war premium battles against the prospect of eased Iran sanctions — two forces that have absolutely no business being in the same sentence. The dollar is catching safe-haven flows, Asia equities are sliding, and Saudi Aramco's CEO quietly pulled out of a major international energy conference. Nothing says 'this is fine' like the world's biggest oil company boss ghosting a conference call.

UK PM Starmer called an emergency economic meeting. The EU's foreign policy chief rang Iran's foreign minister. And somewhere in a trading pit, an oil trader is having either the best or worst week of their career — the spread between those two outcomes is currently about 48 hours wide.