The new reality sinks in
Oil has shifted into a war-risk regime. Prices are no longer being anchored mainly by balances and inventories, but by the probability and duration of supply disruption in and around the Strait of Hormuz. Any interruption of movement through this key channel not only leads to physical damage to production but also the mechanics of shipping. Going forward, the price path depends on whether disruption remains concentrated in the Strait and maritime domain or broadens into repeated strikes on regional energy infrastructure. If the Strait remains functionally restricted, or insurers continue to withdraw cover, Brent is likely to stay elevated with sharp intraday swings. For MENA credit, higher oil prices support Gulf exporters fiscally, but if Strait disruptions curb export volumes and delay receipts, some sovereigns could face short-term liquidity strains and increase external borrowing to bridge cash flow gaps despite elevated headline prices.