The market is yet to fully price in the impact of the halt in oil flows through the Strait of Hormuz.

What most people miss is how slow the oil tankers move — A typical oil tanker moves at the same speed as a bicycle. Now imagine how much time it would take for you to travel all the way from Dubai to a port in the U.S. at this speed (it’s around 50 days!).

It has only been 38 days since the start of the Iran war. Which means that the oil we are getting now had already crossed the Strait when the war started. Based on JP Morgan estimates, these oil flows will stop by April 15th in the U.S. and by April 10th in Europe.

In our view, the outcome will mirror what we saw during Covid: as long as the issue remained contained abroad, the equities barely blinked, and as soon as the shock reached the U.S., a sharp correction followed.

Nothing changes sentiment like seeing your Gas and grocery prices shoot up.