Hormuz Blockade Pushes Brent Crude Above $92
The near-complete blockade of the Strait of Hormuz in early March has sent shockwaves through energy markets, fundamentally altering the landscape for global commodities. Within three weeks of the escalation on February 28, the price of Brent crude oil surged by more than 30% to $92 a barrel, with later spikes approaching $119. The strait, a critical chokepoint for approximately 20% of the world's oil supply and a significant volume of liquefied natural gas (LNG), now faces a disruption that the International Energy Agency (IEA) warns could take up to six months to resolve. The blockage creates a potential "hard缺口" (hard shortage) of over 10% in global oil supply, an event that is rapidly draining global reserves and driving energy prices higher.
Gold Suffers 9.6% Weekly Loss Amid Liquidity Squeeze
Contrary to its historical role as a safe haven during geopolitical turmoil, gold has experienced a severe downturn. In the week following the intense escalation, gold futures plummeted 9.6% to settle at $4,574.90 an ounce, marking the asset's worst weekly performance in 14 years. This unusual price action stems from a severe liquidity crunch affecting the very nations that were recently the largest buyers of the precious metal. Gulf states and other emerging markets, which doubled their share of gold reserves from 12.8% in 2020 to 24.5% by the end of 2025, are now unable to export their primary revenue source—oil. With cash flows from energy exports severed, these nations may be forced to liquidate their highly profitable gold positions to fund essential imports, creating significant selling pressure in a market with few new buyers.
Physical Commodities Eclipse Gold as Short-Term Haven
This crisis has triggered a flight to physical, essential goods over financial instruments, temporarily crowning oil as the premier safe-haven asset. The stark physical shortage of energy has made it more valuable than gold, which lacks intrinsic cash flow. The conflict has exposed the vulnerability of global supply chains, where a disruption to a single chokepoint can have cascading effects. While military analysts suggest reopening the Strait of Hormuz could take weeks or months due to Iran's layered defense capabilities, the immediate market reality is that a barrel of oil is proving more valuable than an ounce of gold. Although the long-term case for gold as a hedge against fiat currency debasement remains, the acute, physically-driven shortage of energy has inverted its traditional relationship with risk.
Edgen Stock·Mar 23 2026, 01:17
