Oil prices surpassed $100 a barrel again after the US President threatened a naval blockade in the Strait of Hormuz. This signals that geopolitical risk is structural following the collapse of US-Iran peace talks. While the market reaction was contained, the move is expected to pressure Iran's major customer, China.
President Trump warned that any Iranian 'fast attack ships' breaching the US naval blockade of Iranian ports would be immediately eliminated. Pakistan's Prime Minister stated that a ceasefire between the US and Iran is holding, with efforts underway to reach an agreement. The International Maritime Organization noted that no country has the right under international law to prohibit freedom of navigation in the Strait of Hormuz.