Significant developments have emerged concerning the Strait of Hormuz. According to the latest data from maritime data analytics firm "Windward," the number of vessels transiting the Strait of Hormuz dropped to zero on March 14th, marking the first such occurrence since the onset of the conflict. By the evening of the 16th, losses in international precious metals widened, with spot silver falling over 4% to $77.21 per ounce and spot gold declining over 1% to $4976.05 per ounce. Furthermore, influenced by escalating Middle East tensions, international oil prices surged again on the 16th, with Brent crude futures briefly rallying nearly 3%.
JPMorgan Private Bank warned in a newly released report that if oil prices do not retreat, the sell-off in the S&P 500 index could intensify. The bank projected that sustained oil prices above $90 per barrel could potentially trigger a 10% to 15% correction in the S&P 500.
Regarding the Middle East situation, according to CCTV News, the U.S. Embassy located within the Green Zone in Baghdad, Iraq, was attacked in the early hours of the 16th, local time. Additionally, the Iraqi Shiite militia group "Brigade of the Guardians of the Blood" issued a statement claiming that an attack on the "Victory Base Camp" near Baghdad International Airport resulted in the deaths of 6 U.S. soldiers.
The number of vessels transiting the Strait of Hormuz dropped to zero for the first time. Xinhua News Agency cited a report from the British Daily Telegraph on the 16th, stating that the global energy shipping choke point, the Strait of Hormuz, saw no vessel traffic on the 14th. This is the first instance since the U.S. and Israel initiated military actions against Iran. The report cited data from maritime data analytics service "Windward," writing: "On the 14th, the number of vessels transiting the Strait of Hormuz dropped to zero for the first time since the conflict began. Before the war, the strait averaged 77 vessel transits per day."
The International Energy Agency (IEA) issued a press release on the 15th, stating that member countries' emergency petroleum reserves would be released to the market soon to alleviate the current tight international oil supply situation. The communiqué mentioned that member countries have submitted specific implementation plans. According to the arrangement, Asian and Oceania member countries will release reserves first, while petroleum stocks from American and European member countries will be gradually released starting from the end of March. The IEA had previously stated that 32 member countries unanimously agreed to release 400 million barrels of strategic petroleum reserves. Latest data shows that 271.7 million barrels are from government reserves, 116.6 million barrels from industry reserves, and 23.6 million barrels from other sources. Approximately 72% of the planned release is crude oil, with 28% being refined products. The IEA pointed out that the global oil market is facing the most severe supply disruption in history, and this emergency collective action is the largest of its kind to date, providing a significant buffer for the market. However, the key to truly restoring stable trade flows still lies in resuming normal shipping through the Strait of Hormuz. Improving insurance mechanisms and strengthening security protection for vessels are crucial to facilitating the recovery of trade flows.
JPMorgan Issues Warning JPMorgan Private Bank recently indicated that if oil prices do not decline, the recent sell-off in the S&P 500 index could worsen. Researchers at the bank stated in a report to clients that they believe rising oil prices could trigger a "domino effect" in U.S. stock markets. Under such circumstances, with oil prices remaining persistently high, losses in U.S. markets could spread globally, intensifying selling pressure in stock markets and ultimately impacting economic growth. JPMorgan Private Bank Executive Director Kriti Gupta and Senior Market Economist Joe Seydl warned that if oil prices remain above $90 per barrel for an extended period, it could trigger a 10%-15% correction in the S&P 500 and have spillover effects on international and emerging markets. "As oil prices rise to $120 per barrel or higher, the sell-off in the S&P 500 will intensify. The domino effect could exacerbate the stock market decline over time," they wrote. They further cautioned that the "domino effect" could continue to impact the U.S. economy, explaining that rising oil prices could harm economic growth through two channels. On one hand, Americans are already paying more at the pump. According to data from the American Automobile Association (AAA), as of last Friday, the national average gasoline price had risen to $3.63 per gallon, a 21% increase since the start of the conflict. The other channel is the wealth effect. Americans might begin to cut back on spending as they assess the impact on their stock portfolios and the erosion of their paper wealth. According to the latest Federal Reserve data, U.S. household holdings of stocks and mutual fund shares totaled $56.4 trillion in the third quarter. JPMorgan estimates that a 10% drop in the S&P 500 could lead to approximately a 1% reduction in U.S. consumer spending.
U.S. Embassy in Iraq Attacked On March 16th, according to CCTV News, the U.S. Embassy in Iraq, located within the Green Zone in Baghdad, was attacked in the early hours of the 16th, local time. During the attack, the embassy activated air raid sirens and its C-RAM defense system, intercepting and destroying one incoming explosive projectile. It remains unclear whether the projectile was a drone or a rocket. As of now, there has been no official response from the U.S. side. In the early hours of the 16th, local time, Iraqi security sources stated that the U.S. Embassy's Diplomatic Support Center near Baghdad International Airport was targeted by drones and multiple rockets. On the evening of the 15th, the same location had been attacked by 3 drones and 5 rockets. Furthermore, Iraqi security sources reported on the 16th that simultaneously with the embassy attack, the "Victory Base Camp" near Baghdad International Airport was struck by rocket fire. In the early hours of the day, the Iraqi Shiite militia "Brigade of the Guardians of the Blood" claimed responsibility for the attack on the "Victory Base Camp," stating it resulted in the deaths of 6 U.S. soldiers and injuries to 4 others. The U.S. has not yet responded to this claim. The Iraqi Shiite militia "Brigade of the Guardians of the Blood" is part of the "Islamic Resistance in Iraq," which has reportedly launched hundreds of attacks using drones and rockets against U.S. targets in Iraq and surrounding areas since February 28th.
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