Wednesday, March 4, 2026…4:10 PM ET
[4:00 PM ET closing prices for stocks; 3:50ish for commodities and bonds.]
For those of us following the markets and the situation in Iran, the Gulf Region and the Strait of Hormuz, we woke up Wednesday to a more stable energy market, though while West Texas Intermediate (WTI) traded in the $74-75 range (after hitting $77 early Tuesday), some major problems remain.
Government pledges to safeguard trade routes may have tempered immediate supply fears, but commercial traffic through the critical Strait of Hormuz remains effectively closed, with the Iranian Revolutionary Guard Corps (IRGC) warning it would “set ablaze” any vessel attempting transit.
Now you can say, oh, the IRGC’s capabilities have been severely degraded, but at least three ships were hit by Tuesday and it’s still extremely risky for shipowners.
“Nothing is sure and we need immediate clarity,” said Khalid Hashim, managing director of Precious Shipping Pcl, a Thai firm that owns bulk carriers. “Lives are at risk, cargoes are at risk, ships are at risk. We need immediate cover that protects us from all this,” he said.
The company currently has some ships in the Persian Gulf and has been struggling to secure war-risk cover before they proceed. The world’s largest insurance mutuals have withdrawn such insurance cover for ships in the area.
With ships unable or unwilling to transit the strait, producers cannot export, supertanker costs are skyrocketing, as I pointed out yesterday, and storage at many Persian Gulf refineries is filling up fast.
Iraq, the biggest Middle Eastern oil producer after Saudi Arabia, has already begun huge cuts to output and faces even deeper reductions, in the clearest sign yet of stress on suppliers in the region.
[If oil producers reach the limits of their storage sites, or “tank tops” in the industry parlance, they have to curtail production.]
Also, while President Trump gave instructions to the government to offer political risk insurance at reasonable rates, that doesn’t just happen with the snap of a finger.
And despite the president’s promise of U.S. naval escorts, the Navy wasn’t prepared for this.
As Warren Patterson, head of commodities strategy at ING Groep NV, noted, while Trump’s moves are welcome news, “Naval escorts would be helpful, but again, this effort will take time. Naval escorts will be sitting ducks to Iranian attacks.” [Or other terrorists you just know are flooding into the region.]
Meanwhile, overnight Tuesday, the Tokyo Nikkei fell another 3.6% and South Korea’s Kospi index had its worst day ever…down 12.1%, after falling 7.2% Monday. It’s about how energy (oil and gas) dependent the two nations are. [The South Korean market was also impacted by a record build-up of margin debt.]
Bottom line, the geopolitical risk premium remains on crude and so much for the supply glut, at least until there is more clarity.
European equity and bond markets stabilized Wednesday. After falling 2.8% to 3.5% Tuesday, London’s FTSE gained 0.8%, the German DAX 1.7% and France’s CAC-40 rose 0.8%.
Lastly, with all the above, AAA reported the price of regular gas nationwide had risen to $3.19, up ten cents from Tuesday, and up from $2.98 last Friday.
The price of diesel that I like to emphasize is up to $4.03 vs. $3.65 a year ago. If you don’t read my Week in Review column, diesel prices have everything to do with the costs of the goods you buy at your grocery and drug stores.
Dow Jones +238…+0.5% [48739]
S&P 500 +52…+0.8% [6869]
Nasdaq +290…+1.3% [22807]
Oil (WTI) $75.20
Gold $5150
Silver $83.10
Bitcoin $73,100 [4:00 PM ET…up 7%…highest level in a month…]
U.S. 2-yr. 3.54%
U.S. 10-yr. 4.08%
Japanese 10-yr. 2.10%
Back Thurs.
Brian Trumbore
