Hegseth Says US Not Ruling Out Military Strikes on Iran, Strait of Hormuz

What Happens Next

• →Oil futures add a $5-10/barrel geopolitical risk premium as markets price in elevated probability of Strait of Hormuz disruption, with particular impact on Asian importers reliant on Gulf crude.
• →Iran accelerates uranium enrichment and disperses military assets to hardened sites, compressing the timeline for a potential US decision on kinetic action.
• →Gulf states including Saudi Arabia and the UAE expand oil storage capacity and fast-track negotiations for alternative export routes bypassing the Strait of Hormuz.
• →Iran deepens energy-for-goods barter arrangements with China and expands use of non-dollar settlement mechanisms, partially blunting the impact of 'Operation Economic Outcast.'

Near-term: Oil futures incorporate a geopolitical risk premium of $5-10/barrel; shipping and insurance costs for Hormuz-transiting tankers rise sharply, increasing delivered crude prices for Asian importers. Long-term: Sustained US maximum-pressure posture drives a structural bifurcation in global energy trade, with a dollar-denominated Western market and a parallel non-dollar market serving Iran, Russia, and their partners.