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Strait of Hormuz Closure Fuels Energy Crisis Fears, Rattles Global Markets

Escalating tensions between the US and Iran are rattling commodity and equity markets as traders grapple with potential long-term supply disruptions over the Strait of Hormuz. Oil prices surged on concerns that a prolonged closure of the vital waterway could severely constrain global energy flows. Central banks may need to maintain higher interest rates longer than expected due to elevated energy prices. Gold declined as investors weighed the implications of sustained higher interest rates. Saudi Aramco reported elevated profits from higher oil valuations but warned of extended market disruption ahead. The company has begun redirecting crude exports through alternative pipeline infrastructure to mitigate transit risks. Market participants are monitoring diplomatic negotiations closely, with some betting that a US-Iran agreement could restore normal passage through the strategic chokepoint. Energy officials have flagged summer demand season as a critical juncture, warning supplies could reach critical levels without swift resolution.