Rubio War Warning Sparks Sell-Off as Oil Nears $115

Global Markets Tumble as Oil Jumps Over 55%

Global markets recoiled after U.S. Senator Marco Rubio privately informed G7 foreign ministers on March 29 that the war with Iran could continue for another two to four weeks. This revised timeline dashed investor hopes for a swift resolution, triggering a broad-based sell-off across risk assets as markets priced in extended geopolitical uncertainty and higher inflation.

The reaction was most pronounced in energy and equity markets. Brent crude oil, the international benchmark, finished the week at $114.57 a barrel, marking a more than 55% increase since the conflict began a month ago. The sell-off hit Wall Street hard, with the S&P 500 declining roughly 7.4% over the same period. The tech-heavy Nasdaq Composite entered a correction, falling over 10% from its October peak, while MSCI’s global equities index slumped approximately 9% in March.

Strait of Hormuz Shipping Plummets 97%

The spike in oil prices is a direct result of a near-total shutdown of the Strait of Hormuz, a critical chokepoint for global energy supplies. Since the conflict started, shipping traffic through the waterway, which typically handles a fifth of the world's oil, has collapsed by 97%, according to data from S&P Global. Only 32 tankers have transited the strait, compared to 1,743 in the preceding period.

This disruption fuels fears of a persistent energy supply shock that could drive global inflation higher. The OECD has already raised its inflation forecasts for major economies, including the U.S. and UK. The situation is compounded by Rubio’s warning that Iran may attempt to establish a "tolling system" in the strait, a move that would create significant and lasting economic damage worldwide.

Bitcoin Pressured as Traditional Safe Havens Fail

The flight from risk has extended to digital assets, with Bitcoin's price falling as investors move to reduce exposure to volatile assets. The downturn reflects a broader market shift away from assets sensitive to macroeconomic and geopolitical shocks. This aligns with analysis suggesting Bitcoin could revisit its $60,000 low, with recent price strength being characterized as a typical bear market rally.

Adding to market anxiety, traditional safe-haven assets are not providing their usual protection. JPMorgan noted that both gold and government bonds have sold off, with yields on the two-year U.S. Treasury note climbing half a percentage point to 3.9%. This breakdown in historical correlations leaves investors with few places to shelter from the escalating market turmoil, forcing many to shift into cash.