It fell apart! Trump is furious, blocking the strait!

Writing: US Stock Investment Network

If you’re an investor, most likely you watched this line on the weekend from start to finish while staring at the screen.

From 21 hours of negotiations, to “turning over the table directly” within 4 hours, to U.S. President Donald Trump announcing a blockade of the Strait of Hormuz—this is not an ordinary geopolitical disruption, but an event where the pricing logic is being forcibly rewritten.

All the assumptions the market held over the past week have, almost entirely, failed this weekend.

US Stock Investment Network states the core conclusion first:

This is not a question of “whether oil prices will rise,” but a question of “whether the global asset pricing anchor is beginning to shift.”

1. From “negotiation failure” to “blockade of the strait”: the starting point of the market’s misjudgment

Many people will simply interpret this event as:

Negotiations didn’t go through → risk escalates → oil prices rise

But if you stop only here, you’re basically missing what matters.

The essence of this is— the path choice has changed.

At the negotiating table, the U.S. demands “zero out nuclear capability”; Iran insists on “retaining enrichment rights + lifting sanctions first.”

This is not a dispute—it is an irreconcilable structural conflict.

What truly causes the talks to break down is something deeper: order and tempo.

U.S.: first deliver results (nuclear commitments), then talk about other issues

Iran: first provide buffer (sanctions/ceasefire), then discuss core issues

With no progress for 21 hours, the issue isn’t that the terms can’t be agreed on in the usual sense—it’s that the worldviews can’t be aligned.

Then things start to spiral out of control—

Within 4 hours after the talks collapse, it moves directly to military and economic measures: blocking the Strait of Hormuz.

The significance of this step is huge:

Switching directly from “game-playing” to “compulsory enforcement.”

2. The Strait of Hormuz: not a geopolitical problem, but the global asset pricing center

Here it’s necessary to clarify a point that many people underestimate:

The Strait of Hormuz is not a normal shipping route; it is the “valve” of global energy pricing.

About 20% of global oil transportation passes through here

It is the core export passage for marginal supply

It is the trigger for the “tail risk” in oil prices

In the past, the market assumed an implicit premise:

Even if tensions rise, the strait will not completely stop the flow

But now, this premise has been broken.

Changing from “limited passage under Iran’s control” to “U.S.-led active blockade” means:

Supply logic shifts from “constrained” to “artificially zeroing out risk.”

These two are not even in the same category.

3. The three main oil-price pricing assumptions have all collapsed

Last week, oil prices fluctuated in a range of 94–97 USD, and that was based on three assumptions:

The ceasefire will continue

The strait will gradually restore passage

The negotiations are still progressing

Looking back now—

Ceasefire: there are fewer than 10 days left, with no extension arrangement

Passage: changing from “restoration” to “blockade”

Negotiations: defined as “failure of the final offer”

All three core variables have been reversed.

That’s also why:

Near-month oil prices surge (spot cannot be obtained)

Far-month prices remain at 50–70 (the market bets on recovery in the future)

A typical extreme backwardation structure

Behind this, the market is essentially saying one thing:

“Short-term is war; long-term is rationality.”

But the problem is—

If the short-term lasts long enough, it will change the long-term.

4. Brent at 100 USD is not a target price—it’s a “switch”

The biggest misconception in the market right now is treating 100 USD as a “price target.”

But from a macro perspective, it’s actually a trigger.

Once Brent Crude Oil stabilizes above 100 USD, it will trigger three things:

1）Inflation resumes its upward path

Current CPI: 3.3%

If oil prices stay at 100: model projections are about 4.3%

If it surges to 120: it could be above 5%

2）The Fed’s path is forced to be repriced

Key person: Jerome Powell

His previous premise was:

As long as inflation expectations remain stable, “oil-price shocks can be selectively ignored”

But if inflation starts to rise again—this premise is immediately invalid.

The result is:

Rate cuts are delayed

Short-end interest rates move up

Expectations of tighter liquidity return

3）Pressure on the U.S. stock valuation framework

The path is very clear:

Oil prices ↑ → Inflation ↑ → Rate expectations ↑ → Valuations ↓

Once this chain reaction starts, it’s hard to stop it halfway.

5. Trump’s “blockade strategy”: strong in the short term, hard to clean up in the long term

From a strategic standpoint, Donald Trump’s move is actually a typical “dual-track operation”:

On one side, he says “most points of agreement have been reached in negotiations” (leaving a way out)

On the other side, he directly imposes a blockade (maximum pressure)

This is a very typical negotiation strategy:

Use actions to raise the other side’s cost of decision-making.

But the problem is—

Once a blockade like this is carried out, it’s hard to withdraw it easily.

US Stock Investment Network believes it creates three side effects:

Oil prices rise → pressure from U.S. domestic inflation intensifies

Market volatility → financial conditions tighten

Political pressure → midterm election risk increases

In other words:

This is not a “button you can withdraw at any time,” but a “deal that can only end once there is a result.”

6. Iran’s strategy: no confrontation, just dragging time

Compared with that, Iran’s response is more “market-oriented.”

Its core three points:

Not rushing to escalate the conflict

Maintaining the possibility of negotiations

Using the passage of time to exhaust the opponent

They even pay attention to the way they respond—even their statements are carefully handled—

By “mocking-style responses” through overseas embassies, not by directly clashing head-on with the Ministry of Foreign Affairs.

This means:

While releasing tough signals, it also keeps room to maneuver.

Put simply:

The U.S. is accelerating, while Iran is slowing down.

And in this game of chess—

The slower side often has the advantage.

7. On Monday and beyond: three real variables to watch

You don’t need to guess the direction of the market in the short term; the key is “confirmation signals.”

1）Whether oil prices can hold above 100 USD

Hold: the market recognizes “the blockade as a long-term variable”

Spike then pull back: the market believes it’s only an emotional shock

2）U.S. 2-year Treasury yields

This is the most direct reflection of “rate cut expectations.”

3）The intensity of execution of the blockade

The key is not “what is said,” but whether:

Ships are truly stopped

Mines are truly cleared

Multiple countries coordinate

The execution details in the first week will determine whether the market will “believe that this is real.”

Final judgment

This round is not simply a straightforward geopolitical conflict, nor is it a short-term oil price trading opportunity.

It’s closer to—

The starting point of a shift in the global asset pricing anchor, moving from “inflation receding” to “supply shock.”

If you’re still using last year’s logic to look at the market—

then you’ll most likely be a step behind.

And in this kind of environment, being a step behind often means the difference between keeping all profits and missing them entirely.