Iran's Hormuz toll push risks permanent energy shift
Tehran’s attempt to levy shipping fees on the Strait of Hormuz could permanently embed its control over global oil flows, a structural shift markets are digesting as European equities defy historical energy shock headwinds.
Tehran is pushing to impose shipping tolls of 5% to 7% on oil cargoes passing through the Strait of Hormuz, a move that could generate nearly $20 billion annually for the regime. While the US and Gulf states are expected to reject such steep fees, analysts note the strategic calculus has fundamentally shifted.
Iran must balance its extraction against the risk of rendering the chokepoint obsolete. If Tehran sets fees too high, neighboring Gulf countries would be economically forced to export crude over land. “An unattractive deal with Iran is the best of limited bad options,” Brew noted. Brent crude held at $88 a barrel this morning.
Markets absorb shocks
Despite the renewed energy supply threat from the Gulf, European equities are proving surprisingly resilient. First-half earnings per share growth for Stoxx 600 companies is tracking at 14% year-on-year, the strongest pace in three years, according to Goldman Sachs analyst Sharon Bell. The index is up 11% year-to-date, trailing the S&P 500's 13% gain but defying the historical narrative that oil shocks disproportionately crush European profits.
Across the Atlantic, investors are weighing blockbuster artificial intelligence earnings against heavy insider selling. AI cloud provider CoreWeave more than doubled its second-quarter revenue, with CEO Michael Intrator citing "sold out" capacity and a swelling $104 billion backlog. However, Jefferies analysts flagged that co-founders have sold roughly $2.9 billion in stock since the company’s March 2025 IPO through pre-arranged trading plans.
Investors ignored the insider sales, pushing shares up 2.42% yesterday and another 17.4% premarket. Attention now turns to US consumer price data due today, where a soft reading around 2.5% would likely keep the Federal Reserve on hold in September. UBS analyst Paul Donovan cautioned that data precision is currently limited, noting absent the current conflict, core inflation would likely be at the central bank's 2% target.
