Global energy markets face a severe supply shock as the Strait of Hormuz remains blocked, pushing oil prices above $100 per barrel for the first time since 2022. President Trump's promise that the Iran conflict would end 'very soon' has done little to calm markets, with futures prices suggesting the crisis could persist through the year. The disruption represents a pure supply shock, unlike the demand-driven spikes of previous energy crises.

European gas markets show particular vulnerability, with TTF futures prices remaining elevated despite recent retreats. The situation echoes 2022's energy crisis following Russia's invasion of Ukraine, though Europe has since built greater LNG import capacity and reduced consumption. US LNG exports have increased 65 percent since 2021, providing some buffer against extreme price volatility. However, with Europe's gas storage levels low after the heating season, the coming months remain uncertain.

Central banks have so far resisted panic responses, with ECB executive board member Isabel Schnabel stating that 'monetary policy remains in a good place.' The inflationary impact extends beyond direct energy costs, affecting food, goods and services across supply chains. While markets expect oil prices to retreat to $75 per barrel by year-end, the duration of the conflict remains the critical unknown factor determining the full economic impact.