WS #16381

The dominant market narrative has shifted sharply toward an energy supply crisis, with Brent Crude surging past $114/barrel to a five-month high on escalating Black Sea and Middle East tensions. This price spike is being actively reinforced by geopolitical developments, including the resumption of Russian diesel shipments to the U.S. following a Trump-Putin deal and reports of Houthi strikes in Saudi Arabia. The market is pricing in a sustained inflationary shock, evidenced by energy leading equities and a flight to safety in commodities, while the broader macro environment remains clouded by uncertainty over the upcoming Fed decision and ongoing geopolitical friction in Eastern Europe.