Bitunix analyst: Only 15% of pre-war traffic remains in the Strait of Hormuz, oil prices and the US dollar are simultaneously exerting pressure on global assets

BlockBeats News, July 22 – Risks in the Middle East are further escalating. Trump stated he has “no interest in meeting” with Iran and threatened a fierce attack on the Ghao Mountain area allegedly housing underground nuclear facilities; in response, Iran warned that if its nuclear sites are attacked, all U.S. and allied interests in the region would become targets. While Pakistan continues to act as a mediator, the U.S. signal that Iran “will pay a price” suggests that military pressure is likely to persist in the near term.

What truly deserves attention is the energy transportation data. Commercial traffic through the Strait of Hormuz has dropped to about 15% of pre-war levels, with many international shipowners withdrawing; two tankers carrying Saudi crude even turned around in the Red Sea and rerouted to the Suez Canal. The Red Sea route, originally considered an alternative, is also facing uncertainty due to Houthi threats of a blockade. Meanwhile, Kazakhstan has announced a suspension of oil exports through the Black Sea, meaning global energy supply risks have evolved from being a “single strait issue” to a situation where “two main shipping routes are simultaneously under pressure.”

This supply shock is reshaping the Federal Reserve’s policy backdrop. The latest ADP data shows a slowdown in U.S. private sector hiring momentum, but market bets on a rate hike this autumn have not diminished because rising oil prices may again push up inflation. In other words, the Federal Reserve now faces a combination of “slowing employment and heating energy inflation,” not just simple economic cooling. This explains why U.S. $8 trillion money market funds continue to shorten duration and increase allocations to overnight and floating-rate assets—large investors prefer sacrificing some return to retain flexibility for repricing.

The foreign exchange market is also reflecting higher funding costs. The USD/JPY briefly broke above 163, marking a new low for the yen since 1986. Even after the Japanese government had previously injected over 11 trillion yen to intervene, it proved hard to resist the triple pressure of rising oil prices, higher U.S. Treasury yields, and carry trades. The market has set 165 as the next level to watch, and some institutions even predict a challenge of 170 within the next year.

On trade policy, the Trump administration is paving the way for new measures after the 10% temporary tariffs expire, with new tariffs on dozens of countries possible as soon as this week. It was also announced that if generic drugs do not relocate production back to the U.S. within two years, they will face a 100% tariff in 2028, rising to 200% in 2029. This “sunset clause with gradual escalation” is essentially forcing a premature reorganization of the global supply chain, with India’s generic drug industry bearing the brunt.

There are also new cost signals in the tech supply chain. TSMC will reportedly increase wafer foundry prices by up to 10% from 2027 onward; meanwhile, OpenAI admitted a hacking incident occurred at Hugging Face, indicating that security costs for AI models and the open-source ecosystem are on the rise. The AI industry is no longer merely a computing power race—it has entered a comprehensive cost era encompassing “wafer production, electricity, cybersecurity, and supply chain resilience.”

In my view, the most crucial point of observation now is not whether oil prices can briefly break $100, but how long energy transportation disruptions persist. If low traffic through the Strait of Hormuz and the Red Sea continues for several weeks, global inventory buffers will deplete quickly, the Federal Reserve’s hawkish repricing could further strengthen, and the period of high U.S. dollar and short-term rates will be prolonged. In such an environment, correlation across asset classes rises, and liquidity and cash management will matter substantially more than pursuing high-volatility narratives.