Kpler has pushed its expectation for a reopening of the Strait of Hormuz into 2027, raising the risk of sustained higher oil prices.
Matt Smith, Kpler’s director of commodity research, gave the revised timeline on CNBC. He said there is no endgame in sight after five months of conflict.
Why the Strait of Hormuz Reopening Timeline Slipped
The United States and Iran signed a memorandum of understanding in June, reopening the strait. Tanker traffic then picked up through early July.
Smith said those flows have since slowed to a trickle. Meanwhile, US forces have continued nightly strikes on Iranian military and maritime targets.
A second chokepoint has now opened. Saudi Arabia had been routing an extra 3.25 million barrels a day into the Red Sea through Bab el-Mandeb.
Smith said that the outlet is now at risk. The Houthis declared a maritime blockade on Saudi shipping and struck two Saudi tankers two days ago.
“And there doesn’t seem like there’s an end game in sight,” Smith said. “We’re looking at our expectations for the Strait of Hormuz reopening… it’s 15 million barrels a day of crude that leaves through there. That is ground to a halt. And we’re pushing that reopening into next year.”
A new threat is emerging in one of the world’s most important shipping lanes. Yemen’s Iran-aligned Houthi militia has declared a naval blockade on Saudi Arabia, raising fears over oil supplies and global trade https://t.co/BE9c7RiFafpic.twitter.com/LmyRDEXnfw
Brent Climbs While Refined Fuels Take the Bigger Hit
Smith said Brent has risen about 40%, or roughly $30, over the past couple of weeks. The benchmark settled at $100.69 on Thursday, its first close above $100 since May 26. Prices then reversed. Brent fell about 4% on Friday to close near $97 after reports of revived US-Iran talks.
Refined products have fared worse than crude. Smith put diesel near $180 a barrel and gasoline near $140.
He said the concerns he raised about jet fuel in May have been addressed. However, that relief came at the expense of diesel and gasoline, and he expects those strains to worsen.
Donald Trump delivered three major policy shocks between July 6 and July 11. He declared the Iran ceasefire over, sending Brent crude oil up 5.2%. The POTUS also ordered a halt to trade with Spain, pushing Spain’s stock market index IBEX 35 down 2.6%.
Trump said the interim agreement with Iran was “over” after renewed attacks on commercial ships and US facilities in the Gulf. American forces then launched fresh strikes against Iranian targets.
Oil markets reacted immediately. Brent settled 5.2% higher, while WTI gained 4.4% and reached a two-week high. The S&P 500 and Dow closed lower, while the STOXX 600 recorded its steepest decline since March.
The surge in oil also pushed Treasury yields higher as investors priced in greater inflation risk. Higher fuel costs could make it harder for the Federal Reserve to lower interest rates.
However, Trump later said the US would continue talks with Iran and played down the prospect of another full-scale war.
Oil just went through one of its most volatile months in years.
The reason is the US-Iran war, which restarted in February after everyone assumed it had ended with last year’s ceasefire.
Since then, oil has swung from $58 to $119 and back down to $71, driven almost entirely by… pic.twitter.com/qtk4mxom6U
Markets will now focus on shipping through the Strait of Hormuz, which carries around one-fifth of global oil supply.
Spain Trade Threat Hits Stocks and Bonds
Trump also ordered Treasury Secretary Scott Bessent to halt trade and visits with Spain. He accused Madrid of failing to spend enough on defence and obstructing the US campaign against Iran.
Spanish markets fell sharply after the comments. The IBEX 35 lost 2.6%, making it Europe’s worst-performing major index that day.
IBEX 35 is Spain’s Benchmark Stock Market Index in Madrid. Source: Yahoo Finance
Santander shares dropped 4.3%, BBVA fell 3% and Zara owner Inditex declined 3.6%. Spain’s 10-year government bond yield rose nine basis points as investors demanded a higher return for holding its debt.
It remains unclear whether Trump can impose a complete bilateral embargo. The European Union handles trade policy for its members, and US-Spain commerce has continued despite earlier threats.
Still, prolonged uncertainty could weigh on Spanish banks, exporters, airlines and tourism companies.
BREAKING: President Trump says the US is “cutting off all trade with Spain.”
— The Kobeissi Letter (@KobeissiLetter) July 8, 2026
Trump Hardens His Position on Russia
Trump made a significant shift on Ukraine during the NATO summit in Ankara. He said the US would license Ukraine to manufacture Patriot air-defence systems, technology Kyiv has requested for years.
Days later, US senators announced an agreement with the Trump administration to advance tougher sanctions against Russia. The legislation could target countries that continue buying Russian oil and gas.
Markets have yet to show a clear reaction because Congress has not approved the final bill. Its impact will depend on the sanctions, exemptions and enforcement measures included in the final text.
President Trump said Wednesday the U.S. will give Ukraine a production license to build its own Patriot missile interceptors for defense, granting a major request from Ukrainian President Volodymyr Zelenskyy amid the ongoing war with Russia. pic.twitter.com/BkG2GIOCRq
Strong secondary sanctions could disrupt Russian oil flows to China, India and Turkey. That would place further pressure on energy prices while increasing demand for alternative supplies.
Meanwhile, the Patriot decision could support defence manufacturers and suppliers. It also signals that Washington may apply greater military and economic pressure on Moscow.
Inflation in the eurozone soared in March, mainly as a result of increasing energy costs across the Old Continent, driven higher by the ongoing conflict in the Persian Gulf.
Consumer prices have jumped on both annual and monthly basis, raising expectations that the European Central Bank may intervene with interest rate hikes in April or later.
Expensive energy is behind rising prices in the euro area
The sudden disruption of energy supplies and markets, caused by the surprise U.S.-Israeli strike on Iran at the end of February, has fueled prices in the eurozone this month.
Annual inflation surged to 2.5% in March, according to preliminary data released by the Eurostat office on Tuesday and quoted by regional media.
The indicator stood at 1.9% in February, when it was hovering just below the 2% target set by central bankers in Frankfurt.
Month-over-month, consumer prices in the countries using the single currency increased by 1.2%, which is the steepest monthly rise since October 2022, as noted by Euronews.
It isn’t very hard to pinpoint the main driver – energy inflation reached 4.9% year-on-year this month, after contracting by 3.1% the previous.
That’s a total of eight percentage points within a few weeks of the start of the war, in which the Islamic Republic retaliated by effectively closing the Strait of Hormuz.
The latter accounted for the transit of around 20% of global oil and gas shipments before the conflict which sent their prices into a spiral.
Brent crude has surged past $100 per barrel, a 50% increase in March, while natural gas is now selling in Europe 80% higher than a year ago.
European inflation is “entirely due to higher energy prices,” according to Bert Colijn, an economist at the Dutch bank ING. “The price at the pump is the main culprit,” he concluded, quoted by Euractiv.
Euro area annual inflation in March 2026 (%). Source: Eurostat
Among the eurozone countries, Croatia had the highest inflation, at 4.7%, followed closely by Lithuania, with 4.5%. Ireland registered 3.6%, while Spain and Greece each recorded 3.3%.
Germany, the economic powerhouse of the euro area, saw 2.8% inflation, 0.8 percentage points higher than its February figure. Italy’s inflation remained unchanged, at 1.5%, and France had a below-average 1.9%.
Meanwhile, Eurostat’s flash estimate showed that core inflation, which excludes energy and food prices as well as alcohol and tobacco, has actually dropped this month, from 2.4% to 2.3%.
At the same time, inflation in the services sector eased slightly, too – from 3.4% to 3.2% – and the prices of non-energy industrial goods fell from 0.7% to 0.5%.
ECB’s response to the high inflation is still uncertain
Analysts are now trying to predict if the European Central Bank (ECB) will return to interest rate hikes in the months to come. While many expect tightening later this year, it’s unclear what the regulator will do in the short term.
Last week, President Christine Lagarde admitted that even a brief spike beyond the target might warrant action on the part of the monetary authority.
She emphasized, however, that the bank will make its decision based on firm data, not forecasts. The next meeting of the ECB’s Governing Council is scheduled for April 30.
According to ING’s Colijn, the likelihood of broader increases in both core inflation and headline inflation grows with the continuation of the war and the disruption it causes. He commented:
“With much uncertainty around how the Middle East conflict will evolve, many scenarios for inflation remain possible, and that’s why the ECB is right to be on high alert.”
BNP Paribas economists Stéphane Colliac and Guillaume Derrien believe core inflation will remain stable in the second quarter and oil will continue to trade above $100. In that case, the ECB may start tightening in June and increase the rate with 75 basis points by the fall.
According to the EU’s Economy Commissioner Valdis Dombrovskis, inflation could exceed 3% this year while output may remain below 1% in both 2026 and 2027.
“For now, the outlook is clouded by profound uncertainty,” he told the media last Friday, warning, “it is clear that we are at risk of a stagflationary shock.”
With that in mind, the ECB is now facing the same dilemma it had to deal with in 2022, the year when the Ukraine war started. The choice is between policy tightening to tame inflation expectations or refraining from rate hikes amid a weakening economy.
