Closure of Strait of Hormuz Imposes €127 Billion Extra Cost on Europe

The closure of the Strait of Hormuz would cause a severe disruption in global energy supply, creating upward pressure on oil prices. This situation would increase inflationary pressures and widen the current account deficit in countries such as Turkey, which are energy importers. The additional cost of 127 billion euros reflected on Europe could reduce global risk appetite and lead to selling pressure in equity markets. In the short term, market sentiment will be negatively affected and demand for safe havens will increase.

News of a closure of the Strait of Hormuz could create upward pressure on Brent by highlighting the risk of supply disruption. However, the price has fallen 1.96% in the last 24 hours and MACD is in negative territory, indicating weak short-term momentum. RSI is neutral around 50, and the price is above SMA20 but below SMA50, presenting an indecisive picture. Although the news is likely to create a geopolitical risk premium, it is unclear to what extent the market has priced it in; therefore, the direction forecast is limited to moderate confidence. A mild upward bias is expected in the 1-3 day horizon, but additional confirmation is needed for a sharp rally.