The last time the world worried about the Strait of Hormuz, it was a threat. Now, Iran's Islamic Revolutionary Guard Corps is making it a policy.
An IRGC spokesperson declared no oil would leave the Gulf for the US or its allies until conditions change.
This is a five-alarm problem. Roughly one-fifth of the world's daily oil supply passes through that narrow chokepoint. Brent Crude surged past $120 per barrel.
The IRGC followed through with direct attacks on commercial shipping vessels, recording multiple incidents in late June and early July.
The US responded by revoking a general license that had permitted limited Iranian oil sales.
The IRGC then escalated, threatening US military and infrastructure sites across the region.
For energy companies, insurance costs have jumped. Some shipping firms are rerouting around the Cape of Good Hope, adding weeks and significant costs.
LNG markets face a similar problem. Qatar, a major exporter, ships through the Strait. Any disruption tightens an already-strained European market.
What investors should watch now: whether US naval forces can protect shipping lanes, if diplomatic back-channels produce de-escalation, and whether IRGC attacks continue.
Currency markets are adjusting. The Japanese yen, Korean won, and Indian rupee are all vulnerable to sustained high oil prices.