Hormuz disruption: what it means for income investors

The current conflict in the Middle East has been dizzying for market participants and policymakers. Although circumstances are subject to sudden change, the current stalemate in the Strait of Hormuz suggests a swift all-encompassing resolution looks unlikely. Instead we see a high probability of a gradual, untidy de-escalation, as pressure continues to mount in energy markets and supply chains, feeding through to the consumer in the form of higher prices. In a separate development, the UAE’s exit from OPEC points to wider fractures emerging within traditional oil supply frameworks,...