ENERGY: Strait of Hormuz Standoff & Shrinking US Buffers

• The Chokepoint Tightens: Oil prices are trading significantly firmer following fresh US strikes on Iran. While President Trump threatened more actions unless Tehran agrees to a deal, Iran has retaliated by declaring the Strait of Hormuz closed until further notice.
• The Shipping Standoff: Even though Iran cannot officially close international waters, the threat has left shipowners highly reluctant to navigate the gulf. Current flows are heavily constrained at just ~2 million b/d (down from a pre-war 20 million b/d), with clear downside risks ahead.
• US Market Cracking Under Tightness: The latest EIA data shows a massive 7.23M barrel drop in US commercial crude inventories—marking the 7th consecutive week of declines (now 5% below the 5-year average). When factoring in Strategic Petroleum Reserve (SPR) releases, total US stocks plummeted by 15.15M barrels.
• Jet Fuel at Record Highs: Refinery activity is shifting into overdrive to meet the global crunch. US jet fuel production has surged to fresh record highs, sitting a staggering 23% above the seasonal 5-year average.

METALS: Gold Wipes Out 2026 Gains as Yields Firm

• The Great Reset: Gold prices extended their brutal retreat, completely wiping out all year-to-date gains.
• Yields Over Geopolitics: Despite the massive escalation in the Middle East (which traditionally triggers a safe-haven rally), institutional investors are hyper-focused on macro policy. Sticky US inflation risks have firmed Treasury yields, crushing the non-yielding precious metal.

AGRICULTURE: The WASDE Countdown

• Sizing Up Supply: All eyes are on the USDA’s monthly WASDE report dropping later today. Markets expect a marginal increase in US wheat ending stocks (to 764M bushels) but a 10M bushel trim to US corn stocks, alongside upward revisions for Argentine corn and soybean output.

What’s Next?

• Looking at the headlines—escalating US airstrikes, a full-blown blockade declaration of the Strait of Hormuz, and threats of wider regional war—the textbook retail trader would expect Gold to shoot to the moon. Instead, Gold is getting absolutely decimated, breaking key structures and erasing months of progress. Why? Because the market understands that a choked energy supply chain means structural, sticky inflation. This forces the Federal Reserve’s hand to keep yields elevated. Higher yields are the ultimate kryptonite for bullion, completely overshadowing its safe-haven status right now.