🚀 Oil prices fall on Monday

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Market Overview
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Year To Date Performances:

1. Oil prices experienced a dramatic reversal on Monday, plunging over 6% after nearly touching $120 per barrel in a volatile overnight session. The initial surge was fueled by Gulf Arab nations like Kuwait and Iraq slashing production as storage tanks overflowed due to the Iranian blockade of the Strait of Hormuz—the most significant oil supply disruption in history. However, prices retreated sharply following President Trump's announcement that the U.S. is "considering taking over" the Strait to force open the chokepoint, through which 20% of global oil flows. Market sentiment was further tempered by reports that the administration may ease sanctions on Russian oil and news of an emergency Tuesday meeting among G7 energy ministers to coordinate a massive release of strategic stockpiles. While energy analysts warn that Brent could still reach $135 if the conflict persists for four months, the White House maintains that the disruption will be measured in "weeks, not months" as U.S. forces continue to attrit Iranian coastal threats.

2. Asian equity markets surged on Tuesday morning, led by a 5% rally in South Korea’s Kospi, as global investors reacted to a sharp de-escalation in oil prices following President Trump’s signalling that the conflict in Iran is "pretty much" complete. After a volatile session where U.S. crude had spiked toward $120 before retreating to $88.66, Japan’s Nikkei 225 jumped 1.7%, and Australia’s S&P/ASX 200 gained 1.5%, reversing the deep "Iran war" discounts seen last week. Market sentiment was further bolstered by the President’s consideration of a U.S. military takeover of the Strait of Hormuz to restore the 20% of global oil supply currently bottlenecked—the largest disruption in energy history, surpassing the 1956 Suez Crisis. This geopolitical shift allowed Wall Street to stage a late-day turnaround, with the Nasdaq jumping 1.4%, providing a strong tailwind for regional tech and manufacturing stocks that had been hammered by high energy costs and supply chain fears.

3. The Trump administration’s decision to blacklist Anthropic as a "supply chain risk" has sent shockwaves through the Pentagon, where the company’s Claude models were deeply embedded in classified networks and active military operations in Iran. Anthropic, which recently reached a $380 billion valuation, filed a lawsuit on Monday calling the ban "unprecedented and unlawful," specifically contesting the designation typically reserved for foreign adversaries. The dispute stems from Anthropic’s refusal to waive corporate safeguards against the use of its AI for autonomous weaponry and domestic surveillance—a stance the Department of Defence labels as "interference" in the chain of command. As the military begins a costly and complex transition to rival models from OpenAI or Palantir, defence experts warn that sidelining the "warfighters' preferred tool" amid major combat operations creates a dangerous gap in reliability and auditing capabilities.

   Headlines

   1. Investors are concerned that the war in Iran could lead to stagflation in the US.

   2. G7 energy ministers are meeting today to discuss how to respond to oil instability.