Strait of Hormuz in Focus as Markets Price Escalation Risk

Invesco’s rapid response outlines four energy scenarios following U.S.–Israeli strikes on Iran, emphasizing that supply disruption—not headlines—will drive markets 

• Base case (40%): military disruption without oil facility damage; Hormuz remains open and risk premium fades.

• Severe case (30%): effective restriction of Hormuz flows, risking material oil/LNG supply shock; Asia most exposed (see charts, p.5).

• Initial reaction: risk-off, higher crude and gold; medium-term path hinges on tanker traffic, insurance costs and OPEC+ output.

Are fundamentals shifting—or merely repricing tail risk? The note details indicators to monitor.