Red Sea Shock

This week's evidence

Brent −5–10% (one print $87.97, thin) as US–Iran paused strikes to give diplomacy space; Hormuz routing bans persist (MRPL). The shock unwound faster than it built. (Reuters/BBC via aggregation) 2026-07-27

FOMC-eve: hike odds ~25-35% and cooling (CME FedWatch ~34.7% options-implied 07-27; prediction markets ~25% today; a 77% September read says the bias is real but deferred). The driver reversed: Brent cratered to ~$84 (−4.8%, 3rd losing day) as the US–Iran fighting pause (07-24) held — after Houthis hit Saudi refineries directly 07-25, the first since 2022. Decision 14:00 ET tomorrow. 2026-07-28 · NEW

2026-07-28 — Brent craters as the wider war pauses

Brent fell 4.8% to ~$84.09, a third straight losing session — well below even the 07-24 retreat level — as the US-Iran fighting pause held through Tuesday and Trump cited “good talks” with Tehran and a “good chance” of a resolution (while warning strikes resume if diplomacy fails). Oil is now a disinflationary story again, cutting against one of the week’s own drivers of Fed hike odds. (CNBC) ⟨daily 2026-07-28⟩

2026-07-26/27 — Bab el-Mandeb traffic collapses; the shooting war itself quietly pauses

Only 11 tankers transited Bab el-Mandeb on Sunday — a multi-month low (Kpler data via Reuters) — as Saudi and Western operators reroute north to the Suez Canal or turn back rather than run the Houthi blockade. The price shock partly cooled but the physical disruption is now showing up in shipping data, not just spot prices. (Japan Times) ⟨daily 2026-07-28⟩
Separately: the US quietly halted strikes on Iran late Friday (07-24) and Iran ceased retaliatory strikes — a broader US-Iran fighting pause, distinct from (and not yet extended to) the ongoing Houthi Red Sea campaign against Saudi shipping and infrastructure. (CNBC) ⟨daily 2026-07-28⟩

2026-07-25 — Direct hit: first Saudi oil-infrastructure strike since 2022

Houthi drones struck Aramco refineries at Jizan and Yanbu — Yanbu alone handles ~92% of Saudi seaborne crude exports (Kpler/AFP) — the first direct strike on Saudi oil infrastructure since 2022; Brent spiked back above $100/bbl same day. (Washington Post) ⟨daily 2026-07-28⟩

2026-07-23 — Tankers struck, blockade declared

Houthi (Iran-backed) forces struck two Saudi oil tankers (Encelia, Layla) in the Red Sea and declared a naval blockade of Saudi ports — the first direct tanker strikes of the current conflict; Trump threatened to hold Iran responsible and floated bombing Iranian infrastructure. (CNBC) ⟨daily 2026-07-23⟩
Brent crude closed +7% at ~$100.69/bbl (intraday peak ~$102), highest in 8 weeks — Goldman flagged a path to $120+ if disruption persists. Became the proximate driver of the day’s Treasury-yield jump, Fed-hike-odds spike, and equity selloff — compounded the Alphabet-led Magnificent 7 rout into its worst day since April 2025’s tariff tantrum. (NBC/Yahoo) ⟨daily 2026-07-23⟩

2026-07-24 — Partial retreat

Brent retreated ~4.3% to ~$97.04, pulling back from the peak as new Trump tariffs (60 countries, effective 07-24) added a competing demand-destruction headwind. (Bloomberg) ⟨daily 2026-07-24⟩