THE WORLD COULD BE HEADING INTO ANOTHER MAJOR OIL SHOCK.
The Houthis have expanded control around the Bab el-Mandeb Strait, putting another critical oil route at risk.
Around 12% of globally traded oil and petroleum products passes through this route.
And the Strait of Hormuz is already disrupted, a route that normally handles around 20% of global petroleum supply.
If both routes remain under pressure, oil prices could stay high for much longer.
That means more inflation.
And if inflation keeps rising, the Fed could be forced into multiple rate hikes, similar to 2022, rather than just one.
In 2022, aggressive Fed tightening sent borrowing costs soaring and global markets had a brutal year.
Another round of multiple Fed hikes would mean tighter liquidity, higher borrowing costs and serious pressure across global markets.$BZ
$CL
The Houthis have expanded control around the Bab el-Mandeb Strait, putting another critical oil route at risk.
Around 12% of globally traded oil and petroleum products passes through this route.
And the Strait of Hormuz is already disrupted, a route that normally handles around 20% of global petroleum supply.
If both routes remain under pressure, oil prices could stay high for much longer.
That means more inflation.
And if inflation keeps rising, the Fed could be forced into multiple rate hikes, similar to 2022, rather than just one.
In 2022, aggressive Fed tightening sent borrowing costs soaring and global markets had a brutal year.
Another round of multiple Fed hikes would mean tighter liquidity, higher borrowing costs and serious pressure across global markets.$BZ
$CL
