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Oil Pulls Back From $120 Spike as Hormuz Disruption Persists, Governments Move to Curb Fallout

Governments rush to cushion consumers facing constrained Hormuz shipping.

Overview

  • Brent surged near $119 before sliding into the $90s as stock markets swung, with volatility spiking and intraday equity recoveries following signals of possible policy backstops.
  • Shipping through the Strait of Hormuz remains sharply reduced, with Lloyd’s List Intelligence citing roughly an 80% traffic drop and fresh attacks reported on Gulf energy infrastructure.
  • The White House said the price rise is temporary and is weighing U.S. naval escorts for tankers, while G7 energy officials discussed coordinated steps such as potential strategic stock releases.
  • Pakistan announced sweeping austerity and conservation moves including nationwide school closures, a four‑day government workweek, 50% remote work, and spending and salary cuts, as Vietnam, Thailand, Bangladesh, India and Sri Lanka rolled out their own fuel‑saving and price‑management measures.
  • Analysts warn sustained disruptions could lift inflation, with U.S. gasoline and diesel prices jumping, some forecasters flagging a risk of $150 oil if flows stay constrained, and Saudi Aramco warning of severe market consequences without restored passage.