A fresh MEXC Crypto Pulse study says the market question raised by the latest US-Iran conflict is not simply whether oil jumped on a given day. The bigger issue is whether a disruption to Middle East energy flows will push inflation higher again and force the Federal Reserve to keep interest rates elevated, or even consider tighter policy.
The report said that in July 2026, military tensions between the US and Iran intensified again, shipping through the Strait of Hormuz fell sharply, and Red Sea routes also came under threat from an expanded Houthi blockade. Brent crude moved above $93 a barrel on July 22, near a six-week high. For equities, the focus has shifted from how long the conflict may last to whether earnings and valuations can absorb higher energy costs, higher bond yields and weaker consumer demand at the same time.
If the disruption to oil flows proves brief, the stock market may still lean on strong tech earnings and artificial intelligence spending for support. If it lasts for weeks or longer, though, investors may have to reassess inflation, rates and global growth together, with consequences for the way risk assets are priced.
Oil flow disruption is moving from a risk scenario to a real market event
MEXC said the shock from the US-Iran conflict is no longer confined to military headlines. As the US resumed a maritime blockade targeting Iran-linked shipping and Iran continued striking targets in the Gulf, commercial vessel traffic through Hormuz has already fallen.
Citing Reuters tracking of Hormuz shipping, the report said only three commodity carriers passed through the strait on July 16, the lowest single-day level since May. No very large crude carriers and no liquefied natural gas tankers completed a transit that day, and some tankers stopped or turned back near the Gulf of Oman.
That matters because the market is no longer only asking whether Iran will formally declare a closure of the strait. The sharper question is whether shipowners, insurers and energy traders have already started reducing traffic on their own because of security risks.
Fewer ships alone can create a supply shock
The study argued that the strait does not need to be fully blocked for global oil flows to suffer. If shipowners judge the risks of attack, seizure or military miscalculation to be rising, tankers may delay departures, change routes or demand higher transport rates.
Insurers may also raise war-risk premiums, shorten coverage periods or refuse to cover certain high-risk voyages. The result is that even when oil production continues, crude may not reach refineries on schedule.
In that setup, the supply shock may first appear in shipping delays, spot premiums and changes in refinery feedstock patterns before it shows up in official export figures.
The Red Sea faces a second layer of pressure
The report said the risk is not limited to Hormuz. Yemen’s Houthi group has threatened a maritime blockade on Saudi-linked vessels and may interfere with traffic near the Bab el-Mandeb Strait.
An Associated Press report on Houthi threats to shipping said Bab el-Mandeb carries roughly 12% of global trade. Even without a full closure, scattered drone, missile or mine attacks could force vessels to reroute around southern Africa.
If both Hormuz and Bab el-Mandeb are constrained, Middle East energy exports would face transport pressure in both directions. At that point, the global market would be dealing with more than a temporary interruption at one chokepoint. It would be looking at correlated disruption across the region’s broader energy logistics network.
Rising oil prices are changing the market’s macro assumptions
According to Reuters energy market coverage from July 22, Brent crude rose 3.12% to $93.85 a barrel and West Texas Intermediate climbed 3.47% to $87.27. Both reached their highest levels since June 11.
MEXC said higher oil prices do not automatically mean a bear market for stocks. The direction of equities depends on how long prices stay elevated, how large the supply disruption becomes, and whether companies and consumers can absorb the added cost.
The market had been leaning on a cooling-inflation story
One of the main pillars supporting stocks had been the view that US inflation was gradually easing, allowing the Fed to stop hiking and leaving room for rate cuts if growth slowed.
An energy supply shock can break that logic. Higher crude prices hit gasoline, diesel and jet fuel first, then work their way through logistics, plastics, chemicals, agriculture and manufacturing into a wider set of goods and services.
If investors begin to think energy-driven inflation will persist, the bond market may push up long-term inflation compensation and Treasury yields may rise with it. That would pressure expensive equities not only through weaker earnings expectations but also through multiple compression.
High oil could bring slower growth and sticky inflation together
The most difficult setup for equities is not oil rising on its own. It is oil rising while consumer spending and corporate margins weaken.
Households may have to devote more income to fuel, electricity and transportation, leaving less for discretionary spending. Companies, meanwhile, may be forced to choose between raising prices, accepting narrower margins or cutting costs.
The report described that mix as a mild stagflationary backdrop: slower growth, but inflation that does not fall quickly enough for the Fed to step in with rate cuts. For stocks that already reflect high growth expectations, that combination is particularly uncomfortable.
The real test for stocks is whether earnings can offset valuation pressure
MEXC said the deeper challenge from the US-Iran conflict is whether earnings growth can continue to outrun rising financing costs and higher input prices.
Major indexes had been able to withstand geopolitical shocks in part because large tech companies were posting strong earnings, AI capital spending remained firm and bank results stayed resilient. But if oil remains above $90 a barrel for an extended period, the market may have to ask whether those supports are still enough.
Tech stocks are not insulated from rates
Large technology companies are not usually seen as direct victims of oil costs, but their valuations are highly sensitive to long-term interest rates.
If energy prices lift inflation expectations, markets may scale back bets on rate cuts and the 10-year Treasury yield could move higher. A higher discount rate for future cash flows would directly reduce the theoretical value of richly priced tech names.
AI infrastructure also requires large investments in data centers, electricity, copper, natural gas and cooling equipment. Higher energy costs can raise not only the discount rate applied to those businesses, but also the real cost of the spending behind them.
Whether tech can keep leading the market, the report said, will depend on whether earnings growth can cover both a higher discount rate and higher infrastructure costs.
Cyclical sectors face a margin squeeze
Airlines, shipping, logistics, autos, chemicals and industrial companies are more exposed to fuel and raw material costs.
Some can pass those costs through with fuel surcharges or price increases, but there is usually a lag. In sectors with intense competition or soft demand, companies may struggle to pass everything on to customers.
Retail and consumer services can also be hit indirectly. As household spending on energy and transport rises, outlays on restaurants, travel, entertainment and other discretionary categories may come under pressure.
Energy stocks do not have unlimited upside
Higher oil prices usually help upstream producers and some oilfield service companies. Stronger cash flow may support dividends, share buybacks and capital spending.
But if expensive oil eventually slows global growth, demand expectations for energy can weaken as well. Refiners, petrochemical firms and companies heavily dependent on specific routes may even suffer from mismatches in feedstock and logistics.
That is why the report described energy as a likely short-term relative winner, not a sector where every name benefits at the same time.
The impact will split across regions and sectors
MEXC said an energy shock will not hit every country or asset class in the same way. Dependence on imported crude, currency stability, fiscal subsidy capacity and industrial structure all shape the outcome.
Asian oil importers face more direct stress
India, Japan, South Korea and parts of Southeast Asia rely heavily on imported energy. Higher oil prices can widen trade deficits, weaken local currencies and push domestic inflation higher.
The report cited Reuters coverage of global markets on July 13, which said oil prices jumped nearly 9% in a single day after the US-Iran conflict escalated again, while global equities came under pressure and bond yields rose. That reaction showed that energy importers may face not only higher corporate costs but also capital outflows and exchange-rate strain.
India was highlighted as particularly sensitive because the cost of imported energy feeds directly into inflation, fiscal spending and the current account. For governments that use subsidies to steady fuel prices, sustained high oil also raises the fiscal burden.
The US market has some internal hedging
The US is both a major consumer of oil and a major producer of oil and gas. Higher energy prices can squeeze consumers, but they can also lift revenue for shale producers and energy service companies.
That gives the US equity market some industry-level offset. Even so, major indexes are heavily weighted toward technology and consumer names, so gains in energy may not be enough to counter falling valuations in large growth stocks.
Europe faces a dual constraint from energy security and growth
After its earlier gas crisis, Europe has adjusted its energy mix to some extent, but it remains sensitive to imported energy and global shipping.
If oil, natural gas and transport insurance all rise together, European industrial costs could climb again. Autos, chemicals, airlines and manufacturing may face more pressure than comparable US sectors.
If the European Central Bank is forced to weigh weak growth against renewed inflation, the risk premium on European equities could move higher.
What investors should watch next
The report said military headlines can drive short-term price swings, but the medium-term market path will be decided by measurable shifts in oil flows, costs and financial conditions.
Actual shipping volume
The first item to monitor is the daily number of crude tankers, LNG carriers and product tankers moving through the Strait of Hormuz.
If traffic recovers within a few days, the risk premium in oil prices may fade quickly. If flows stay weak, supply disruption may start to show up in refinery inventories and spot markets even without a formal closure.
Tanker freight rates and war-risk insurance
Freight and insurance costs may signal supply-chain stress earlier than benchmark crude prices do.
If tanker rates from the Middle East to Asia or Europe keep rising, physical traders are still paying extra to move cargo. In that case, end-user energy costs may not fall in step even if Brent pulls back for a time.
Crude term structure
The degree to which spot prices trade above forward prices can reveal how tight the market sees near-term supply.
If the premium on nearby contracts widens, refiners and traders are showing a greater willingness to pay for immediate delivery. If deferred prices rise without a clear tightening in spot structure, part of the move may be more about financial risk premium than physical scarcity.
Treasury yields and inflation expectations
MEXC said the bond market remains the key transmission channel for equities. Investors should track 2-year and 10-year Treasury yields, implied expectations in Treasury Inflation-Protected Securities and shifts in market pricing for the Fed path.
If oil rises while long-term inflation expectations remain stable, stocks may be able to absorb the shock. If yields and inflation expectations rise together, pressure on high-valuation assets would increase much more clearly.
Can crypto serve as a hedge against an energy shock?
The report said the US-Iran conflict and disrupted oil flows will affect Bitcoin and other digital assets as well, but the transmission is not straightforward.
Bitcoin has a fixed supply cap, so some investors may see it as protection against currency debasement and long-run inflation. In a sudden geopolitical shock, however, Bitcoin still tends to be hit by tighter liquidity and broader selling in risk assets.
Bitcoin still behaves more like a liquid risk asset in the short term
When rising oil pushes up the US dollar, Treasury yields and market volatility, leveraged investors may cut exposure. Because Bitcoin trades around the clock and remains highly liquid, it often becomes one of the assets sold quickly to raise cash.
That means Bitcoin may fall alongside tech stocks in the early stage of an escalation rather than behave like gold right away. Only if markets start reading the conflict as a longer-term story of fiscal expansion, currency debasement or capital controls may Bitcoin’s scarcity narrative regain support.
Stablecoin demand may receive structural support
The study also said greater demand for energy trade settlement, cross-border payments and protection from local-currency volatility could lift demand for dollar stablecoins in some markets.
Stablecoins do not remove issuer risk, reserve-asset risk or regulatory risk. Still, their 24/7 transferability can provide an additional channel when traditional bank settlement is constrained.
In other words, geopolitical conflict may pressure crypto prices while at the same time increasing the use of stablecoin infrastructure.
Altcoins face higher liquidity risk
If an energy shock tightens global financial conditions, capital usually exits less liquid assets first, especially those whose valuations depend on longer-dated narratives.
Bitcoin and Ethereum may capture a relatively larger share of flows, while smaller-cap tokens, leveraged protocols and high-yield strategies face greater liquidation pressure. The report said investors should not assume the entire crypto market benefits from geopolitical stress just because Bitcoin has a possible anti-inflation angle.
MEXC Crypto Pulse’s central view
The team said the most important point is not whether Brent traded above $90 on a particular day. It is that the market’s previous faith in a low-inflation soft-landing setup is now being tested by events.
For some time, equities had been able to tolerate war, tariffs and fiscal risk because investors believed inflation would keep easing, earnings would keep growing and the Fed would still have room to cut rates. A prolonged disruption to energy transport could challenge all three assumptions at once. Corporate costs would rise, consumer demand could weaken and central bank flexibility would narrow.
The study also argued that markets may be misreading the transmission if they reduce the story to a simple “good for energy, bad for airlines” trade. The real pivot sits in bonds. If higher energy prices do not lift long-term inflation expectations, the effect on equity valuations may remain limited. If oil, inflation expectations and Treasury yields all move up together, valuations may reprice even while current earnings still look solid.
For crypto, the report’s conclusion was that Bitcoin’s macro-asset identity is getting stronger, but that is not the same as being a stable safe haven. Bitcoin may benefit over the long term from fears of currency debasement, while still dropping with tech stocks during a short-term liquidity squeeze. Cross-asset investors, the team said, need to separate the long-term scarcity thesis from near-term risk exposure instead of forcing Bitcoin into a single label.
Key points from the Q&A section
The article’s FAQ section added that the Strait of Hormuz links the Persian Gulf with open waters and serves as a major export route for energy from Saudi Arabia, Iran, Iraq, Kuwait, Qatar and the UAE. Military blockades, drone attacks and vessel security risks can force tankers to pause transits or reroute. Even if the strait is not fully shut, higher insurance costs, freight rates and delivery delays can reduce effective supply.
It also repeated that before the conflict, roughly one-fifth of the world’s oil supply moved through Hormuz, along with large volumes of LNG and refined products. With too little substitute pipeline and shipping capacity available in the short run, any sustained disruption could quickly affect refinery feedstock supply in Asia and Europe and push global energy prices higher.
On stocks, the report said higher oil prices raise costs for transport, manufacturing, chemicals and agriculture while reducing the share of household income available for other spending. If energy inflation lifts the broader price level, the Fed may delay rate cuts and bond yields may rise. When lower earnings and higher discount rates hit at the same time, equities usually face a larger correction risk.
On likely beneficiaries, the study named upstream oil companies with stable output and lower production costs, some oilfield service firms and energy infrastructure operators. Defense and some materials names may also draw capital. Even there, though, risk remains. If high oil ultimately drives recession, energy demand and valuations may fall too.
The sectors most exposed to oil-flow disruption, according to the article, include airlines, logistics, shipping, autos, chemicals, industrial manufacturing and discretionary consumption. Asian and European companies with heavier dependence on imported energy may also face currency pressure. Firms unable to raise prices quickly or lacking long-term fuel hedges may see the sharpest margin hit.
Asked whether oil at $100 would automatically trigger a stock market crash, the report said no. The answer depends on how long prices stay high, whether growth slows, whether companies can pass through costs and how central banks respond. If oil spikes and then retreats, markets may recover quickly. If disruption persists and pushes up core inflation, both valuations and earnings expectations could come down together.
On Bitcoin as a hedge, the report said it may attract demand in an environment of long-term currency debasement and restricted capital movement, but its near-term behavior still depends heavily on global liquidity. During an escalation, investors may sell Bitcoin to cut risk or meet margin needs. It can at times reflect scarcity, the article said, but it is not a stable, low-volatility wartime hedge.
The final point was practical: investors should keep watching shipping volume through Hormuz, security conditions around Bab el-Mandeb, tanker war-risk insurance, Brent near-term spreads, Treasury yields and US inflation expectations. If those indicators worsen together, the conflict would be shifting from a news shock to a sustained macroeconomic one.