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Oil's climb to $87 a barrel is doing damage beyond energy markets. Alarm over a battle for the Strait of Hormuz has spread to stocks and bonds, reviving fears of an inflation shock that investors had worked to price out.
The case for treating this move seriously The Strait of Hormuz is the physical fact at the center of this.
It is a critical oil corridor, and any sustained contest for control of it changes the cost of moving crude for buyers and sellers everywhere.
The $87 price reflects a market assigning real probability to supply disruption, not treating geopolitical headlines as noise that will fade by Friday. Stocks and bonds taking simultaneous hits is the tell.
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