The New Supreme Leader Speaks
Mojtaba Khamenei, 56, delivered his first statement as Iran's new Supreme Leader on Thursday. The message was clear: no surrender, no negotiations, continued pressure.
"The lever of blocking the Strait of Hormuz must undoubtedly continue to be used," the statement read. He called on regional countries to shut US military bases and vowed vengeance for the blood of Iranian "martyrs."
The market reaction was immediate. Oil, which had pulled back below $90 on hopes of a quick resolution, surged back above $100 within hours.
Oil's Historic Volatility Continues
This week saw perhaps the most extreme oil price swings in modern market history:
• Monday open: WTI spiked to $119.48 — then crashed 15% on Trump's "war is very complete" comment
• Tuesday: Fell further to $85 as IEA reserve release was announced
• Thursday: Rebounded above $100 after Khamenei's blockade commitment
• Friday close: Brent at $103.14, WTI at $98.71
Brent gained approximately 10% for the week, following last week's 28% surge. The Strait of Hormuz remains at less than 10% of normal traffic according to the IEA. This is the biggest oil supply disruption in history.
The IEA's Historic Response
On Wednesday, the International Energy Agency announced it would release 400 million barrels of oil from member country reserves — the largest coordinated release in the organization's 52-year history. The US is contributing 172 million barrels from the Strategic Petroleum Reserve.
The market's verdict? Insufficient.
The 400 million barrels represents roughly four days of global oil consumption, or 16 days of normal Strait of Hormuz volumes. As IEA Executive Director Fatih Birol acknowledged, "The most important thing for a return to stable flows is the resumption of transit through the Strait of Hormuz."
February CPI: The Calm Before the Storm
Tuesday's inflation report showed consumer prices rose 2.4% year-over-year in February — exactly in line with expectations. But this data was collected before the February 28 strikes. The oil shock isn't reflected yet. Economists estimate that if oil stays around $100, headline CPI could rise to 3.5% by year-end.
The Fed is expected to hold rates at its March 18 meeting. First cut now priced for September at earliest.
GDP Revised Sharply Lower
Q4 2025 GDP was revised down to just 0.7% — half the previous estimate. Combined with February's -92,000 jobs and oil above $100, this is the clearest stagflation setup we've seen since the 1970s.
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