Monday: Oil & US$ to Rise as Strait Closes Again

The Strait of Hormuz shut again on Saturday after Iranian hardliners rejected President Trump's overtures, and Iranian forces struck a container ship and an oil tanker. The sudden closure forced thirteen tankers to reverse course into the Persian Gulf, instantly reviving geopolitical risk premiums in crude markets. ANZ commodity strategist Sunny Kamari expects Asian‑time oil prices to claw back Friday’s losses, potentially adding roughly $100 per barrel to both Brent and WTI. While the market remains cautiously optimistic that negotiations will produce a deal, the immediate supply shock is already pushing oil higher.

Beyond the price spike, the logistics of reopening the strait introduce a longer‑term drag. ANZ estimates that even if the waterway reopens tomorrow, it will take five to six weeks for tankers to reposition and for insurers to reset rates, keeping upward pressure on freight costs. Meanwhile, the US dollar, which slipped 0.1% after the weekend, is expected to regain strength as peace‑talk optimism wanes, according to ANZ FX head Marjabin Zaman. Investors will also watch the global Purchasing Managers’ Index releases on Wednesday for clues on demand, especially as elevated energy costs continue to feed price pressures.

Central banks are already factoring the heightened uncertainty into policy calculations. The ANZ senior economists note that the recent surge in New Zealand petrol (+19%) and diesel (+42%) prices has not yet filtered into core inflation, a lag that could extend up to twelve months. In the United States, the employment story remains concerning, prompting some analysts to anticipate more rate‑cut pricing than further hikes. While countries like Australia and Singapore may adopt modest policy tweaks, the overarching narrative is a modest cost to growth paired with a short‑term inflation spike, leaving policymakers to balance price defence with fragile growth prospects.