A severe escalation in the US-Iran conflict effectively shuttered the Strait of Hormuz this week, prompting the United Arab Emirates to historically quit OPEC and sending Brent crude surging past $126 a barrel. President Donald Trump’s strict naval blockade and stalled peace talks have fueled a massive energy shock, pitting war-driven stagflation against the deflationary momentum of the global AI boom.
US President Donald Trump is maintaining a strict naval blockade on Iran, driving a massive energy shock across the global economy as the Strait of Hormuz remains completely shut. The ongoing military standoff has propelled Brent crude past $126 a barrel, prompting Big Oil CEOs to warn of a supply “cliff’s edge” and forcing central banks worldwide to pivot back toward near-term rate hikes to combat resurging inflation. This twin dynamic of soaring fuel costs and geopolitical gridlock is increasingly clashing with the opposing deflationary and growth forces of the global AI boom, creating brutal crosscurrents for investors.