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Rabobank’s Michael Every highlights a sharp Oil rally ahead of United States (US) Consumer Price Index (CPI) and Fed Chair Warsh’s testimony, with prices jumping 9% and then another 2.5% to $85. The move is linked to escalating tensions around Hormuz, new US-imposed toll proposals, Iranian attacks on tankers, and renewed Houthi strikes that could threaten key east–west Oil flows.
Hormuz tensions drive energy repricing
“The day before US CPI (expected to moderate to 3.8% y/y from 4.2% and to 2.8% core) and Fed Chair Warsh’s first testimony to Congress, oil leaped 9%, the largest move since 2020. Today, it’s up another 2.5% to $85 at time of writing.”
“There, besides reimposing the naval blockade of Iran, President Trump stated those using the waterway will now pay 20% of the value of cargo as compensation to the US, the strait’s new guardian.”
“Bloomberg estimates Trump fees at $30m per supertanker, the equivalent of $8 on oil and $177 on LNG.”
“However, the Yemeni government, OK’d by the Saudis after Trump approval, bombed a runway in Houthi-occupied Sanaa to try to prevent an Iranian plane landing; now the Houthis are firing at the Saudis again for the first time in years, potentially endangering vital east-west oil flows via Yanbu on the Red Sea.”
