Just caught something pretty significant in the oil market. WTI is pushing toward $73 right now, and the move makes sense once you look at what's actually happening geopolitically.

The Strait of Hormuz situation is escalating fast. For context, roughly a fifth of global crude flows through there, so when Iran's military announces they're closing it and threatening to fire on any vessel attempting passage, you're looking at immediate supply shocks rippling through the market. This isn't theoretical - it's a direct hit on global oil logistics.

What's driving this is the ongoing Iran-US confrontation. Tehran is retaliating after US strikes took out some of their top military figures and command infrastructure. Meanwhile, American forces are claiming they've neutralized Iranian air defense systems and missile launch capabilities, which theoretically weakens Iran's ability to sustain prolonged conflict. But that's also why the supply shocks from this geopolitical tension feel so acute right now.

Here's where it gets interesting for the broader market: Fed expectations just shifted noticeably. The probability of steady rates in June jumped to 53.5% from 42.7% just days earlier. Why? The ISM Manufacturing report on Monday showed Prices Paid - basically factory-level inflation - spiked to 70.5 versus expectations of 59.5. That kind of inflation print makes it harder for the Fed to cut, which changes the entire demand calculus for commodities like oil.

So you've got this dual pressure: immediate supply shocks from geopolitical disruption pushing prices up, but potential demand concerns if the Fed stays hawkish longer than markets were betting. The $73 level reflects both dynamics playing out simultaneously. Worth monitoring how this resolves over the next few weeks.