Oil Surges on US-Iran Strait of Hormuz Escalation, Boosting CAD

Crude oil prices continue to climb sharply to start the new trading week as the US-Iran military conflict intensifies in the Middle East, casting a dark shadow over global risk sentiment. Iran has escalated operations by attacking ships in the strategically critical Strait of Hormuz, a vital chokepoint for global oil supply, prompting the United States to reimpose a naval blockade in the region. This dual escalation threatens significant disruption to global oil supply chains, driving crude prices higher and injecting volatility across forex markets. Oil-correlated currencies like the Canadian dollar (CAD) and Norwegian krone (NOK) stand to benefit from elevated crude prices, while oil-importing nations' currencies, particularly JPY, may face additional headwinds. The geopolitical risk premium embedded in oil prices is also supporting safe-haven flows into USD and CHF. Traders should closely monitor developments around the proposed 10-day ceasefire and any further Strait of Hormuz disruptions, as these will be primary drivers for oil-sensitive forex pairs in the near term.