Oil markets have reacted sharply to the effective closure of the Strait of Hormuz. Paul Gooden, Head of Global Natural Resources, explains why the disruption is reverberating through oil and gas markets, how supply constraints are pushing prices higher, and what it could mean for energy markets in the weeks and months ahead.

A new commodity order is taking shape, defined by geopolitical fragmentation, electrification, supply constraints, regionalisation of energy and materials markets, and a re-ordering of global supply chains.

War in the Middle East and the disruption of energy flows through the Strait of Hormuz has potentially introduced a stagflationary shock at a time when markets were positioned for a goldilocks or reflationary backdrop.

The closure of the Strait of Hormuz has triggered a severe global oil supply shock, leaving the market with a deficit that available alternatives cannot meaningfully offset. While prices have yet to fully reflect the strain, tightening inventories and disrupted flows point to higher near-term volatility and a lasting shift in the oil price outlook.