Iran has solidified its grip on the Strait of Hormuz with the establishment of the Persian Gulf Strait Authority (PGSA), mandating that all vessels submit detailed information declarations for transit approval. This move comes amid heightened tensions following conflicts with the US and Israel, with Iran threatening military action against ships that do not comply. Given that approximately 20% of global oil and LNG supplies traverse this critical chokepoint, Iran’s control significantly impacts the global economy.

The implications for financial markets are stark. The recent closure of the Strait has already triggered a supply shock, pushing US petrol prices above $4.50 per gallon for the first time in four years. With tanker traffic plummeting to just 40 ships per week compared to an average of 120 pre-conflict, analysts predict that Iranian control could reduce transit capacity to 40-50% of previous levels, creating long-term volatility in energy markets.

Market professionals should closely monitor developments in the Strait of Hormuz, as ongoing tensions could lead to sustained fluctuations in oil prices and broader implications for energy stocks.

Source: xtb.com