#夏日创作营 The situation in the Middle East is heating up again, with both bulls and bears resuming their tug-of-war—how should retail investors position themselves?
The conflict between the US and Iran has escalated again. Iranian forces have arrived, and there are direct clashes between the Houthis and Saudi Arabia in Yemen. The Middle East is getting even more lively; the trend is becoming increasingly tense. The next show involving the US, Israel, and Saudi Arabia versus the Houthis and Iran is only just beginning.
Especially if the Houthis block the Bab el-Mandeb Strait, oil prices will become even more insane! When the Strait of Hormuz was blocked before, the global economy was already badly affected. If both the Strait of Hormuz and the Bab el-Mandeb Strait are blocked this time, oil will surge wildly. The crypto market and the US stock market will then likely see another big drop. For now, it’s still better to wait patiently. Especially with Trump and Iran playing house all day—opening and then blocking again and again, taking turns to harvest!
Now let’s look at the market. BTC is still trading in a consolidation range around 63,700 to 64,500. Next, focus on the resistance level at 64,800. If it breaks through and holds, it will be highly likely to return to hovering above 65,000. On the downside, keep a close watch on 63,500. Once it breaks, it will likely accelerate the sell-off. As for ETH, it is still oscillating above 1,850. Next, we need to see whether it can break above 1,900. After 1,900 holds, then consider whether it can go back up to eat the resistance above. On the downside, support at 1,800 is fine as long as it doesn’t break. With the month-end approaching, wait for the month line to close and the direction will come out. The operator is still waiting for the final round of the bulls-bears game before sweeping everyone out. With the overall environment not good, it’s better to take profits when you can. When things are uncertain, rest and wait patiently for the month line to close.

#BrentReturnsTo100
On July 24, 2026, Brent crude oil prices surged past $100 per barrel for the first time since May, triggered by Houthi attacks on two Saudi oil tankers — the Encelia and Layla — in the Red Sea, creating a second chokepoint alongside the already-blockaded Strait of Hormuz. One vessel was left ablaze and others forced to reverse course, sending shockwaves through global markets.
The Dual Chokepoint Crisis
The world now faces a dual chokepoint crisis threatening approximately 20 million barrels per day. The Strait of Hormuz, carrying roughly one-fifth of global seaborne oil, has been blockaded by Iran for months. Tanker crossings fell to just one on July 24. Meanwhile, the Houthi blockade of Bab al-Mandab at the Red Sea entrance threatens 2.5 million barrels per day of Saudi exports from Yanbu, which Riyadh had been using as an alternative. Saudi Arabia rerouted 75% of exports through the Abqaiq-Yanbu pipeline, but this alternative is now under direct threat, creating the largest oil supply disruption in market history.
Trump Administration Escalation
President Trump warned of "major military punishment" against Iran and the Houthis, declaring on Truth Social that the U.S. will hold Iran responsible since "the Houthis are a Surrogate and/or Proxy of Iran." He told Axios he is close to deciding on a "massive attack" potentially the largest of the conflict, stating Iran has not "received enough pain yet." Trump also announced the U.S. would use Iranian funds under American control to compensate for ship damages, which Iran's Foreign Minister Abbas Araghchi warned sets an "incendiary precedent." American forces completed 13 consecutive nights of strikes on Iranian targets, reaching as far as the Caspian Sea. U.S. Marines from USS Tripoli have been interdicting Iranian shadow fleet tankers under Operation Epic Fury.
Iran's Expanding Strategy
Iran rejected a ceasefire proposal delivered by Iraqi Prime Minister Ali al-Zaidi. Iran's negotiator stated "the problem is America's outlook." Iran expanded attacks to U.S. bases in Bahrain, Jordan, and Kuwait. Revolutionary Guards mined routes near Hormuz, and one tanker caught fire after an explosion on July 23 while attempting passage. Iranian state media suggested major Gulf Arab ports may be added to target lists.
Stagflation Fears Worldwide
Goldman Sachs estimates oil at $100 could slow global growth by 0.4 percentage points. The 10-year Treasury yield climbed to its highest since January 2025. European gas prices face their biggest monthly jump since March. Brent rallied nearly 40% in July. The IEA released 400 million strategic reserve barrels but failed to stabilize prices. U.S. Strategic Petroleum Reserves fell to 319.5 million barrels, the lowest since April 1983. Kpler estimates one-third of global fertilizers transit through Hormuz, meaning food prices could remain elevated for extended periods, disproportionately hurting vulnerable emerging markets.
India's Vulnerability
Every $20 per barrel increase adds approximately INR 3.6 lakh crores of economic burden. Consumer inflation could rise 100-150 basis points to 5.2-5.5%. The RBI may implement two rate hikes if oil sustains above $100. Morgan Stanley projects GDP growth could slow to 5.7% if oil hits $150 for one quarter. The rupee faces depreciation pressure, foreign investors are exiting, and the current account deficit could widen to 3% of GDP.
Pakistan: Mediator Under Pressure
Pakistan works with Chinese backing to restart negotiations. A Pakistani official told Reuters "the Chinese are unhappy because Iran's attacks and the Hormuz closure are hitting their interests." However, domestic fuel costs are climbing and inflationary pressures intensifying, forcing the Sharif government to balance mediation against economic hardship.
China: The Swing Buyer
China consumes 90% of Iran's oil exports and is the world's largest swing buyer. Beijing initiated peace talk efforts, and its vast stockpiles from discounted Russian and Iranian oil purchases have prevented an even sharper surge. China's import reductions during the crisis have been significant, and when Beijing resumes larger purchases could determine the next oil cycle phase.
Russia: Profiting from Chaos
Russia benefits from higher prices and competitor disruptions, with alternative pipeline routes unaffected. Ukraine has attacked over 150 Russian shadow fleet vessels in the Black Sea, adding another shipping disruption layer. Moscow positions itself as a potential mediator while benefiting from the energy windfall.
OPEC and Saudi Arabia
Saudi Arabia faces an unprecedented situation with both eastern and western export routes under threat. OPEC+ approved 188,000 bpd production increases for August, but these measures are overtaken by the latest escalation. Saudi official selling price cuts from earlier July are now irrelevant.
Financial Markets
Equities logged their worst session in a month, with Tesla and Alphabet losing roughly $500 billion. Gold softened 2% to $4,030.09 per ounce on Fed rate hike prospects. Bitcoin fell below $77,000 on July 23 before recovering near $78,000, with approximately $1.19 billion in forced liquidations across BTC and ETH shorts. Oil perpetual futures on Hyperliquid topped $106 with over $481 million in open interest.
Aviation and Maritime
American Airlines cut its 2026 outlook. United Airlines reported fuel costs up $2.3 billion year-over-year in Q2, expecting $6 billion additional costs for the full year. War risk premiums for affected routes have increased exponentially, with some insurers excluding coverage entirely. Vessels routing around Africa add weeks to deliveries and substantially increase costs.
Diplomatic Landscape
UN Secretary-General Guterres warned the Middle East is pushed to the "edge of the unimaginable." The U.S. House narrowly passed a resolution halting military action. Democratic senators demanded full casualty accounting from the Pentagon. Pakistan's mediation backed by China remains the most active diplomatic channel.
Outlook
Bank of America expects oil around $100 for the remainder of 2026, averaging $92.50, converging below $70 by end-2027. Analysts warn $120 is achievable if both chokepoints remain blocked, and $150-200 possible under worst-case scenarios. Price stabilization requires demonstrated diplomatic progress. Without it, the global economy faces prolonged stagflation with elevated inflation, slowing growth, tightening financial conditions, and increasing geopolitical risk premiums across all asset classes.
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