WS #14345

The US-Iran conflict is escalating sharply. The US struck Iranian rocket launchers on Larak Island in the Strait of Hormuz, the first US offensive action in a month, and Iran has retaliated with ballistic missile attacks on US forces in Jordan, with interceptions and impacts reported at Muwaffaq Salti Air Base. Brent crude has surged over 2% back above $90/barrel, and European gas prices have hit a six-month high above €70/MWh, reflecting the disruption to LNG shipping from Qatar. The escalation is corroborated across multiple sources (CNBC, AP, Reuters, GDELT, and social media), and the market is pricing in continued supply disruption. Counter-signals include reports that the Trump administration is avoiding a major conflict due to depleted interceptor stockpiles, and that most incoming missiles have been intercepted, but the immediate trajectory is escalation. The Fed rate hike narrative remains stable, with September hike odds at 57% after Warsh's hawkish comments, and US stock futures are flat to slightly lower. The Venezuela oil deal, which could add supply, is a potential long-term counter to the oil spike but is not yet material. The dominant theme is ESCALATING.