Explore why the 2026 Hormuz Strait crisis did not push Brent crude to extreme forecasts, while U.S. stocks hit records, driven by SPR releases, tech earnings and AI capex.
In May 2026, global financial markets showed a striking structural dislocation. Historically, bottlenecks on key maritime trade routes have often been accompanied by surging energy commodity prices, intensifying inflation pressure and subsequent stock market pullbacks. However, since the Strait of Hormuz entered a state of substantial blockade at the end of February 2026, Brent crude prices have remained far below the extreme levels of $130 to $150 previously forecast by several institutions, while the S&P 500 Index and Nasdaq Composite Index continued to reach record highs. This clear divergence between geopolitical tensions and capital market trends can be analyzed from two angles: supply-side intervention measures and structural support factors in the equity market.
Supply Management: The Role of Strategic Reserves Among Major Consumer Countries
Current oil price trends reflect active supply management by major energy-consuming countries. The Strait of Hormuz usually handles around 20 million barrels per day of global crude oil shipments, accounting for about 20% to 30% of global seaborne oil trade. After the conflict broke out, theIEAcoordinated 32 member countries to unanimously agree on releasing 400 million barrels of strategic petroleum reserves, the largest coordinated action since the agency was established in 1974. Among them, the U.S. Department of Energy separately announced the release of approximately 172 million barrels from theSPR, while major importing countries such as Japan and South Korea also activated their own reserve release mechanisms.
This series of emergency measures effectively eased the short-term supply gap caused by logistics restrictions in the Middle East, temporarily suppressing the geopolitical risk premium in the energy market. However, analysts from several institutions noted that reserve releases are essentially a “painkiller” rather than a “scalpel”: they can relieve symptoms, but cannot fundamentally resolve the problem of structural supply reduction.
(Source: Xinhua, March 12, 2026)
Stock Market Drivers: Corporate Earnings Performance and Technology Sector Investment
The resilience of global equity markets, especially the U.S. market, mainly comes from two key factors: continued upward revisions to corporate earnings expectations and the expansion of capital expenditure in the technology sector.
Upward Revision of Earnings Expectations
Data from Goldman Sachs Research showed that earnings performance among S&P 500 constituents in the first quarter of 2026 reached its strongest level in nearly five years. Full-yearEPSforecasts were raised to $309, with year-on-year growth reaching a double-digit level, while average corporate margins remained stable. The combined revenue growth of four technology giants—Google, Amazon, Meta and Microsoft—reached 20%, while earnings growth was as high as 61%, making them the core engine driving overall index earnings expectations.
AI Infrastructure Capital Expenditure
The structure of modern equity markets is highly concentrated in a small number of technology giants. In 2026, expected global investment in artificial intelligence infrastructure and data center construction was further revised upward. Annual capital expenditure expectations for hyperscale technology companies were raised to $751 billion, with an $80 billion upward revision in a single quarter. Market analysis shows that earnings growth in this sector depends more on improvements in digital productivity than on sensitivity to oil price fluctuations in the traditional sense. This is also an important reason why the sector has been able to remain strong despite the energy shock.
(Source: Goldman Sachs Research, May 2026)
Historical Comparison: Conceptual Comparison of Geopolitical Shocks and Reserve Responses
Comparing the current Strait of Hormuz crisis with the supply disruption during the Russia-Ukraine conflict in 2022 helps explain the structural causes behind this round of “decoupling.”
| Event | Scale of Supply Shock | Scale of Strategic Reserve Response | Asset Price Reaction Characteristics |
|---|---|---|---|
| 2022 Russia-Ukraine conflict | Partial disruption of crude oil and natural gas exports | Two coordinated IEA releases totaling about 182.7 million barrels | Oil prices fell briefly, then rebounded again within several weeks |
| 2026 Strait of Hormuz crisis | A transport route handling nearly 20 million barrels of crude oil per day was substantially obstructed | The largest release in IEA history, totaling 400 million barrels | Brent crude remained far below extreme forecast levels, while stock markets reached new highs at the same time |
Review of Recent Related Events
Cause: On February 28, 2026, the United States and Israel carried out military strikes against Iran. Iran’s Islamic Revolutionary Guard Corps then announced a full blockade of the Strait of Hormuz, banning all vessels from passing through. International oil prices and domestic futures markets rose sharply at the same time.
Development 1: On March 11, 2026, the International Energy Agency announced that 32 member countries had unanimously agreed to release 400 million barrels of strategic petroleum reserves. The administration led by U.S. President Donald Trump, the current president of the United States, announced during the same period that it would release 172 million barrels of domestic reserves, while major importing countries such as Japan and South Korea followed suit.
Development 2: In mid-May 2026, the United States and Iran held indirect talks in Doha, and market expectations for a ceasefire agreement continued to rise. During this period, the S&P 500 and Nasdaq indices repeatedly reached record highs, with the S&P 500 closing at record levels twice, on January 28 and April 15.
Industry impact: In late June 2026, as a temporary U.S.-Iran ceasefire agreement advanced, shipping through the Strait of Hormuz accelerated, and major oil-producing countries such as Saudi Arabia resumed port loading operations. Brent crude prices fell to around $72, the lowest level since the conflict broke out at the end of February.
(Source: Trading Economics, June 28, 2026)
Ongoing Risk Factors: Assessing Long-Term Potential Impact
Although the overall market currently remains in a strong uptrend, energy and macroeconomic analysts point out that several risk factors in the second half of the year still deserve close attention.
Capacity Limits of Strategic Petroleum Reserves
The strategy of releasing strategic petroleum reserves is inherently constrained by both stockpile levels and release pace. Due to continuous large-scale reserve drawdowns since the beginning of the year, strategic reserve levels in several major energy-consuming countries have started to decline significantly. According to the International Energy Agency’s usual practice, reserves are generally released gradually over the following 6 to 12 months. If the logistics bottleneck in the Strait of Hormuz lasts longer than these intervention measures can support, the market may still face the risk of sharp crude oil price volatility and correction. Key factors to watch include:
The actual level of remaining deployable reserves among major consumer countries
The actual pace of shipping recovery through the Strait of Hormuz
The degree of alignment between production increase capacity in Middle Eastern oil-producing countries and tanker capacity
Monetary Policy Outlook and Inflation Pressure
If energy prices rise more than expected in the second half of the year, they may trigger a chain reaction in global monetary policy. Several central banks, including the U.S. Federal Reserve System, still maintain their current policy stance. If inflation pressure heats up again, central banks may choose to delay previously planned rate cuts or even consider further monetary tightening. This is also a macro variable that investors need to weigh carefully while current market valuations remain at historically high levels.
Questions About the Relationship Between the Strait of Hormuz and Global Markets
How important is the Strait of Hormuz to global crude oil supply?
The strait handles nearly 20 million barrels of crude oil shipments per day, accounting for about 20% to 30% of global seaborne oil trade, and is a key route for crude oil exports from major Middle Eastern oil-producing countries.
Why did oil prices not surge above $130 as predicted this time?
Major consumer countries coordinated through the International Energy Agency to release the largest strategic petroleum reserve volume in history. In addition, subsequent progress in ceasefire talks gradually restored shipping, jointly limiting the extreme upside potential for oil prices.
Why have technology stocks remained strong amid geopolitical conflict?
Earnings growth among technology giants depends more on artificial intelligence infrastructure investment and improvements in digital productivity, making them relatively less sensitive to traditional oil price fluctuations. This allows them to maintain stronger earnings resilience despite the energy shock.
Can strategic petroleum reserve releases suppress oil prices over the long term?
Reserve releases are essentially a buffer tool for addressing short-term supply disruptions. They are limited by stockpile levels and release pace. If geopolitical conflict becomes prolonged, the suppressive effect of reserves will gradually weaken.
How would rising oil prices affect central banks’ rate-cut paths?
If energy prices rise more than expected and push inflation pressure higher, major central banks may delay their planned rate cuts or even reconsider monetary tightening, which would affect both stock and bond markets.
