The economy has a Strait of Hormuz deadline for Trump: Two weeks

Core Viewpoint - The ongoing tensions in the Strait of Hormuz, exacerbated by the U.S.-Iran conflict, are causing significant uncertainty in global oil markets, with executives preparing for potentially high oil prices and supply chain disruptions [1][2][3]. Oil Price Forecast - United Airlines CEO Scott Kirby anticipates oil prices could reach $175 and remain above $100 through 2027, indicating a need for companies to plan for this scenario [1]. - Energy sector executives are scenario planning for three potential outcomes regarding the reopening of the Strait of Hormuz: by the end of March, mid-year, or a prolonged closure through the end of the year [4]. Market Reactions - The Nasdaq has entered a correction, marking four consecutive weeks of decline, affecting both risk-on assets and safe havens like gold and bonds [2]. - The military's focus on securing the Strait of Hormuz is critical, with expectations that if no resolution is found by April 1, an energy crisis could emerge, leading to shortages in countries like India, Japan, and South Korea [9][10]. Supply Chain Concerns - Current measures to conserve oil supply, including strategic petroleum reserve releases, may not be sufficient to address a potential 10 to 12 million barrel per day deficit [8][13]. - The inability to redirect oil flows through alternative routes, such as the Saudi East-West Pipeline, further complicates the situation [13]. Long-term Implications - Even if the Strait of Hormuz situation resolves, an enhanced risk premium in oil prices is expected due to damage to production facilities across the Middle East [17]. - The market is on the brink of setting a new floor for WTI prices around $100, with traders closely monitoring developments in the region [19][20].