WS #12617

The US-Iran conflict continues to escalate sharply, with new military strikes and supply disruptions driving oil prices higher. Brent crude surged 3.75% to $94.42, with a separate report citing $95.43, as the Strait of Hormuz and Bab el-Mandeb chokepoints see significant traffic declines (Hormuz -31%, Bab el-Mandeb -34%). IRGC struck Bahrain, and US missiles hit Iran's Larak Island, while Saudi Arabia reported explosions near King Fahd Airport and active air defense near King Abdulaziz Air Base. The Pentagon is seeking an additional $67 billion to replenish weapon stockpiles, adding to the $37.5 billion already spent. Oil prices are now up over 30% from $71 on July 1. European gas prices are approaching Iran war highs amid winter supply fears. The aluminum market faces deepening deficits if Hormuz disruptions continue, per Norsk Hydro. Separately, Trump approved a landmark US-Saudi nuclear deal, raising Israeli concerns of a regional arms race. On the trade front, Trump announced phased generic drug tariffs (0% from Aug 2026, 100% in Aug 2028, 200% from Aug 2029), hitting Indian pharma exports. In earnings, AT&T beat on profit and subscribers, GE Vernova raised guidance despite an EPS miss, and Super Micro's strong gross margins were seen as positive for Nvidia and Dell. Tesla and Alphabet report after the close today. The dominant theme is ESCALATING across the Iran conflict, oil supply, and trade policy.