Oil Surge Pressures USD Pairs as US-Iran Conflict Escalates at Hormuz

Crude oil prices are rallying sharply to start the new week as escalating military confrontations between the US and Iran in the Strait of Hormuz fuel supply disruption fears. Iran has struck commercial tankers transiting the critical waterway, prompting the US to reimpose a naval blockade in the region. The Strait of Hormuz handles approximately 20% of global oil shipments, making any disruption a significant macroeconomic event. Rising oil prices are expected to weigh heavily on oil-importing currencies, particularly USD/INR, USD/JPY, and EUR/USD, while commodity-linked currencies such as CAD may find support. The geopolitical risk premium is casting a dark cloud over broader risk sentiment, with safe-haven flows likely to benefit JPY and CHF. Traders should monitor developments closely as further escalation could push WTI toward key resistance levels and amplify volatility across forex markets. Near-term, energy-sensitive pairs like USD/CAD may see increased directional moves as the market prices in sustained supply risk.