Comment: Oil jumps 7% as Strait of Hormuz risks stoke fresh volatility

Russell Shor, Senior Market Analyst at FXCM, commented:

“A two-week ceasefire is in place in the Middle East, but failed talks over the weekend and reports that the US is to pursue a blockade of Iran’s ports point to rising tensions rather than resolution. Oil flows through the Strait of Hormuz remain constrained, which helps explain why prices have pushed back above $100 per barrel.

“If the situation escalates further, Brent could move back towards $120, adding renewed pressure on risk assets and broader equity markets. For now, Brent appears to be trading in a $100-$120 range, and as long as that holds, the environment remains inflationary with continued margin pressure for companies.”