Here is a quick mid-day update of how financial markets have opened Monday following the US/Israel attack on Iran.
1. The NZD has fallen sharply in a risk-off trade turn away from commodity currencies. It started the day at 60 USc, fell at the open to 59.5 USc, and has recovered somewhat to 59.7 USc now. That is not a majo net move.
2. The NZX50 opened down -1.4%, but has stabilised slightly, now down -1.2%.
3. The gold price has risen in early trade. It started at US$5278/oz and is up +US$72 or +1.4% from there to now US$5350/oz. It is still rising. The silver price is up +1.6% to US$95/oz.
4. The oil price is up +8%, with the Brent crude benchmark rising from its opening price of US$73/bbl, now up at US$79/bbl. This is perfectly understandable with the Straits of Hormuz closed. But the US domestic (WTI) price is up the same way. (Trump is making Venezuela rich again.)
5. The UST 10 year yield is now down to 3.93% although most of that dip came before the open this morning, This is its lowest since September 2024. The NZGB 10 year is now at 4.31%, down -5 bps.
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not sure of this analysis - thoughts?
The UAE and Saudi pipelines can only carry about 5 million barrels per day combined. That leaves a 13-million-barrel deficit in the global market. Mechanically, the world economy cannot sustain this for more than 14–21 days without seeing a global recession.
As of late afternoon on February 28, 2026, the global oil market is in a state of absolute paralysis. The mechanical disruption of the Strait of Hormuz has shifted from a "threat" to a functional reality.
The short answer: Yes, a de facto blockade has begun.
1. The Blockade: "Hold Position"
The Iranian Navy has officially issued VHF radio instructions to all commercial vessels in the Persian Gulf to "hold position and avoid transiting the Strait of Hormuz." * The Mechanics of the Blockade: While Iran has not physically "chained" the waterway, the mere instruction, backed by the presence of IRGC fast-attack boats and the threat of sea mines, has caused insurance premiums for tankers to skyrocket by 400–500% in the last few hours.
Shipping Reaction: Most major shipping conglomerates (like Maersk and Frontline) have ordered their fleets to anchor. Roughly 12 million barrels of oil per day are currently "stuck" behind the invisible line of the Strait.
2. The Oil Market Shock
Because markets are currently closed for the weekend, the "real" price discovery won't happen until Monday morning, but "shadow markets" and futures are already showing historic spikes:
The Price: Analysts at Goldman Sachs and Bloomberg are forecasting that Brent Crude could open as high as $120–$150 per barrel on Monday. It was trading around $73 just yesterday.
The Impact on the U.S.: This creates a major mechanical problem for the Trump administration. A key pillar of the President’s domestic platform has been low energy costs. If this blockade persists, U.S. gas prices could realistically hit $6.00 or $7.00 per gallon within weeks, which may be why Congress is moving so quickly on the War Powers Resolution.
3. Damage to Global Energy Infrastructure
The "counterattacks" have moved beyond military bases to the very "bottlenecks" of the energy world:
Radome Destruction: As mentioned earlier, the destruction of the U.S. communications suite (radome) in Qatar has made it harder for the Navy to provide the "escort convoys" that tankers would need to break the blockade.
Refinery Threats: While the U.S. has avoided hitting Iranian oil fields (to avoid a total global collapse), Iran has signaled that if the strikes continue, they will target the Abqaiq processing facility in Saudi Arabia.
It was no coincidence the US invaded Venezuela and secured their oil prior to the attack on Iran. America is attempting to take away China’s cheap oil supply.
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