What Happened
The Strait of Hormuz has closed again, raising acute questions about the durability of the Iran-US ceasefire. Roughly 20% of global seaborne oil transits this chokepoint daily, its disruption is not a tail risk, it is a systemic supply event with immediate pass-through implications across energy, inflation, and credit.
What Our Data Says
This closure arrives into a market that was already absorbing an extraordinary oil move. Our most recent WTI indication (FRED daily, April 9) shows $114.01, a +36.2% one-month surge that has not yet appeared [in CPI](/metrics/weo-cpi-in) data. That pass-through lag was already the single most dangerous mispricing in the macro landscape before today. The AV spot WTI reference of $92.57 (21.4 hours stale) and the FRED daily figure represent a meaningful divergence in sourcing that we cannot reconcile into a clean directional trade, but the structural direction is unambiguous: oil was already in a supply-shock trajectory, and Hormuz closure compounds it.
On volatility, we face a data problem: the VIX PriceSnapshot shows 34.54 while the FRED daily resolver shows 25.78, a significant divergence we cannot resolve directionally. We flag both without constructing a false narrative. What we can say is that at any point within that range, volatility was NOT pricing a Hormuz closure. The geopolitical escalation cluster our NVI framework flagged (NVI 75/100, escalation as an accelerating narrative) has now crystallised into a major fundamental event.
Gold at $4,820.45 (stale, 21.4h) was already at all-time highs and confirming a bull thesis with positive expected value across all macro scenarios. A genuine Hormuz closure adds a fifth pillar to that bull case, direct geopolitical safe-haven demand, on top of CB accumulation, fiscal hedge, inflation hedge, and hard-landing insurance.
HY credit spreads (BAMLH0A0HYM2 at 3.12bp as of April 9) remain historically compressed and represent acute mispricing if oil shocks through to stagflation deepening. Energy sector credit is particularly exposed.
What This Means
The Hormuz closure does three things simultaneously. First, it converts our 20% Energy Supply Shock scenario, WTI to $125–145, from contingent to probable. Second, it arrives 24 hours before the April 10 CPI print, which was already the most consequential data event of the quarter. Any reading at or above 3.0% (our 20% base probability before this event) now carries a harder supply-shock interpretation, the Fed faces an inflation impulse that is structural, not demand-driven, and therefore impossible to resolve by tightening without crushing growth. That is textbook stagflation deepening. Third, it directly challenges ceasefire stability, a return to active Iran-US hostility would reprice sovereign risk premia globally and stress USD safe-haven flows in complex ways given the dollar's already-precarious 100 DXY level.
The CFTC oil positioning context matters here: oil shorts were at the 2nd percentile, meaning this market was historically underhedged against exactly this event. A short squeeze in crude accelerates the CPI pass-through.
Positioning Implications
Gold is the highest-conviction response: LONG GOLD thesis is now reinforced across every pillar simultaneously. The one thing to watch with laser focus is the April 10 CPI print, if it comes in at ≥3.0% and Hormuz remains closed, the stagflation regime upgrade to maximum conviction is warranted and gold's next leg toward $5,000+ becomes the base case, not the bull case.
Explore these indicators together: Chart WTI Crude Oil, WTI Crude Oil, and 3 more on the Indicators Dashboard