WS #7188

The dominant macro narrative remains the escalating oil supply crisis driven by the US-Israeli war on Iran, with multiple corroborating signals in this window. OPEC production has fallen more than 30% due to the Strait of Hormuz closure, and the IEA now forecasts a 1.78M bpd supply deficit for 2026, erasing a prior surplus. Ukraine drone strikes have halted Russia's Perm oil refinery and struck the Taman oil terminal, compounding supply disruptions. Toyota and ExxonMobil have warned suppliers of incoming lubricant oil shortages due to Iran tensions, threatening automotive and industrial supply chains. The UAE is installing anti-drone defenses around oil storage facilities near Dubai airport. A potential counter-signal emerged: Pakistan and Iraq have struck separate energy deals with Iran to secure oil and LNG passage through the Strait of Hormuz, which could partially offset the blockade's impact. Separately, US PPI surged 1.4% in April, the fastest pace since 2022, driving the Dow down 200 points and fanning Fed rate hike fears. Kevin Warsh's confirmation as Fed chair advances alongside the Clarity Act, positioning major changes to Fed policy. In corporate news, Nvidia surged to a new all-time high after Jensen Huang boarded Air Force One with President Trump for the China summit, adding ~$428B to market cap. FedEx board approved the spinoff of FedEx Freight, effective June 1. Siemens reported a Q2 beat. Meta is trading marginally lower as traders weigh stablecoin payout rollout. The Philippine Senate standoff over an ICC arrest warrant continues but appears contained. The oil crisis narrative is ESCALATING, with new supply disruptions and demand-side warnings reinforcing the bullish energy thesis.