Global Energy Markets

Attacks tied to the Iran war have effectively choked Strait of Hormuz traffic, sharply lifting oil and gas prices and sending longer-term interest rates higher since the Feb. 28 outbreak. That energy-driven inflation spike has all but erased market expectations for Fed cuts this year — CME FedWatch shows no cuts priced and about a 25% chance of a hike by October — and Fed officials warn higher inflation or drifting expectations could put rate increases back on the table.

Bahrain has introduced a draft U.N. Security Council resolution that would authorize countries and naval coalitions to use 'all necessary means' to keep the Strait of Hormuz open, a Chapter Seven move that implies possible U.N.-backed military force against Iranian efforts to choke off shipping. The text, obtained March 24 by the Associated Press, demands Iran immediately stop attacking merchant vessels and interfering with navigation through the waterway, where attacks have halted nearly all tanker traffic despite Tehran’s claim it allows safe passage for non-enemy ships. Diplomats say several countries, including veto-wielding China and Russia, oppose the current wording and object to placing the measure under Chapter Seven, prompting Bahrain to rework the draft and making a near-term vote unlikely. France has countered with a separate resolution that avoids naming Iran, is not grounded in Chapter Seven, and instead urges all parties to refrain from escalation and return to diplomacy. For a U.S. audience already feeling energy-price pain from the Iran war, the story signals that big powers are now haggling over whether the U.N. will bless armed escorts or strikes to reopen one of the world’s most critical oil chokepoints—and that politics in the Security Council may keep that legal cover out of reach for now.