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The Strait of Hormuz situation:
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
Reuters is now reporting that Iran is notifying vessels that it is CLOSING the Strait of Hormuz.
If officially closed, 20+ MILLION barrels of oil PER DAY will be impacted, or 20% of global supply.
What's next? Let us explain.
(a thread) pic.twitter.com/GPFaNVKUsW
After US strikes on Iran last night, ships in the Strait of Hormuz are now receiving warnings.
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
As of 12:30 PM ET, the US has recommended ships avoid the Strait of Hormuz.
In their 2025 analysis, JP Morgan described this as their worst case scenario in an Israel-Iran war. pic.twitter.com/B7eqZXUQTF
Why is this the case? Because energy prices tie DIRECTLY into CPI inflation.
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
According to a Fed study, every $10 rally in oil prices has the ability to increase inflation by 20 bps.
Oil prices are already up ~$15 from their recent lows, potentially adding ~30 bps to CPI. pic.twitter.com/k7jeMmmhwJ
The next question is, why not take a different route?
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
Hormuz is the only sea outlet for oil-producing countries like Kuwait, Qatar, Bahrain, and much of Saudi Arabia's production.
This means these countries have no OTHER direct path other than pipelines, which are limited. pic.twitter.com/aZYmLVJOtF
And, oil markets have already been partially pricing this in.
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
The cost of shipping 2 million barrels of crude from the Middle East to China is up to ~$200,000 per day, the highest since the 2020 pandemic.
This marks a +584% increase since the first week of January. pic.twitter.com/4SHv58ubkY
So, what will happen to oil prices on Sunday night when futures open?
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
As seen below, a large geopolitical risk premium has already been priced-in to oil markets.
This makes the next 24 hours crucial: will Trump begin pushing for a new deal or continue the military pressure. pic.twitter.com/6QBVfgIFSF
The last 12 months have shown us that President Trump likes to make market-moving moves on Friday night.
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
The question becomes:
Will this be a brief conflict like June 2025 or a prolonged war with Iran?
Follow us @KobeissiLetter for real time analysis as this develops. pic.twitter.com/gurlWYPplO
By using military force, making it too dangerous or legally impossible for commercial shipping to transit (and insure).
— The Kobeissi Letter (@KobeissiLetter) February 28, 2026
The biggest benefactor of closing the Strait is Russia. China and India will need to buy more Russian oil (at higher prices, and with convertible currency) to make up for the supply disruption.
— Michael Loucks (勇祐) (@MikhailPLoucks) February 28, 2026
Canadian shale oil producers will also benefit.
Chart courtesy of Grok. pic.twitter.com/AAk9IF713C
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