Market Highlight 04.03.2026

The U.S - Iran war could deliver a meaningful negative shock to the global economy, which is still struggling to absorb the effects of President D. Trump’s higher trade tariffs. For Europe, a prolonged period of elevated energy prices would push the economy closer to the edge of recession. For the U.S, this scenario would place the FED in a difficult position - forced to choose between a war-driven inflation impulse and political pressure from the President to cut interest rates to support growth. For China, reduced access to discounted Iranian crude would add to strains on an economy already facing high U.S tariffs and a still-weak property sector. Roughly 20% of global oil supply transits the Strait of Hormuz, adjacent to Iran. Bloomberg Economics research estimates that every 1% decline in supply lifts oil prices by around 4%. This implies that a sustained closure of the Strait could drive oil prices up by about 80% from pre-war levels - to roughly USD 108/barrel. In a worst-case scenario, oil could remain around this elevated level through the fourth quarter of this year.

A sharp rise in oil prices would hit the economy through multiple channels - raising costs for consumers and businesses, eroding purchasing power, and weighing on growth. It would also push inflation higher, lifting transportation costs and the price of anything reliant on petrochemical inputs. If oil remains above USD 100/barrel, inflation could rise by around 0,8% by the end of this year. Combined with the inflationary effects of President D. Trump’s tariffs, U.S inflation would exceed 3%, materially above the FED’s 2% target - making further rate cuts difficult.

The USD/VND interbank exchange rate closed yesterday at 26.215, with an intraday low of 26.170. The effective ceiling rate for the day was 26.298.

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