Oil Shock to Equity Returns

Strait of Hormuz Impact on Inflation and U.S Equity Returns

Executive Summary

• Oil Shock Scenarios and CPI Impact: The Strait of Hormuz is the world’s most critical energy chokepoint; disruption scenarios range from +30% oil ($86 WTI, +1.05pp CPI) to +121% ($146 WTI, +4.20pp CPI). A full blockade would raise consumer prices roughly as much as in early 2022. Full passthrough takes 6–12 months, but equity markets ty…