Just caught something interesting in the oil market. WTI has been climbing toward $73 recently, and the driver behind this move is pretty significant - the Strait of Hormuz situation is creating real supply shocks that traders can't ignore.

Here's what's happening. Iran's Revolutionary Guard announced they've essentially closed the Strait of Hormuz and warned they'll target any vessel attempting to pass through. Since roughly 20% of global crude flows through that waterway, you can imagine how quickly this escalated into a supply shock scenario. The military tensions between Tehran and the US have been escalating, with both sides trading strikes and announcements about destroyed command posts and air defense systems.

The geopolitical piece is one layer, but there's another factor working against the dovish Fed narrative that was floating around earlier. The latest ISM Manufacturing PMI report showed factory-level inflation heating up more than expected - the Prices Paid component hit 70.5 versus the 59.5 forecast. That number basically killed the idea of easy rate cuts coming in June. Fed rate-hold probability jumped to 53.5% from 42.7% just days before, which means the market's now pricing in a stickier inflation picture.

So you've got this interesting confluence: geopolitical supply shocks pushing oil higher on one side, and a more hawkish Fed outlook potentially dampening longer-term demand on the other. The supply shocks are immediate and visible, which is why WTI's been holding these higher levels. Whether this sustains depends on how the Middle East situation develops and whether those inflation numbers force the Fed to stay patient longer than the market was betting on a few weeks ago.