Overview
- Negotiations between the United States and Iran broke down when a 60‑day memorandum expired on Monday, increasing fears of longer disruptions to shipments through the Strait of Hormuz.
- Global crude benchmarks climbed, with Brent trading around $90–91 per barrel and WTI near $84–85, as traders priced in higher supply risk from the Gulf.
- Refining capacity losses and constrained processing have widened refining margins, with Paul Krugman and energy agencies citing roughly a $35 per‑barrel rise in the crack spread since the war began.
- Financial markets reacted: U.S. indexes fell about 0.5%, Treasury yields rose, and sovereign‑risk measures jumped for vulnerable countries, with Argentina’s JP Morgan index near 483–489 basis points.
- Higher wholesale and refining costs are already lifting pump prices in places such as Spain and could feed broader inflation, complicating central‑bank policy choices and prompting local fiscal and regulatory responses.