If you’ve been watching NQ, ES or Bitcoin this year and wondering why price action has been so unpredictable, the answer isn’t in your charts. It’s in the Strait of Hormuz.
This article breaks down exactly what’s happened, why it matters to traders, and how to think about geopolitical risk in your decision-making — without needing a politics degree.
The Strait of Hormuz is a narrow waterway between Iran and Oman, roughly 33 miles wide at its narrowest point. It is the only sea route out of the Persian Gulf — and through it passes approximately 20% of all global oil consumption. Saudi Arabia, UAE, Kuwait, Iraq and Qatar all export their oil through this single chokepoint.
When it’s open, the world’s energy supply flows freely. When it’s disrupted, oil prices spike globally — and that ripple effect reaches every financial market on the planet within hours.
On 28 February 2026, US and Israeli military forces launched strikes against Iranian nuclear facilities. Iran responded by announcing it would close the Strait of Hormuz to all commercial traffic.
The effect on energy markets was immediate and severe. Brent crude, which had been trading around $70 per barrel, surged to a peak above $119 per barrel within weeks. As of today it sits around $103/barrel — still historically elevated even after a partial ceasefire.
This is the question most newer traders ask — and it’s a great one. Here’s the chain of cause and effect:
This is why NQ dropped thousands of points after the conflict began, despite no change in US tech company earnings. The market was repricing risk and future cash flows — not reacting to the tech sector itself.
Two reasons: ceasefire talks, and the realisation that the worst-case scenario wasn’t playing out.
President Trump announced a ceasefire in mid-April and extended it indefinitely this week. Each ceasefire headline has been a green light for risk assets to rally — because it reduces the “oil stays at $119 forever” scenario that markets were pricing in during the panic.
The recovery in NQ from 23,000 back to 27,178+ is markets saying: “We overpriced the downside, now we’re correcting that.”
Markets don’t just react to what’s happening. They react to what they expect to happen — and then correct when reality differs from those expectations.
Bitcoin’s relationship with geopolitical risk is more nuanced than equities. In theory, BTC is meant to be a hedge against exactly this kind of situation — dollar debasement risk, inflation, geopolitical instability. In practice, during the initial panic, BTC sold off alongside everything else as traders raised cash.
But the recovery pattern has been interesting. BTC has outperformed the Nasdaq on a relative basis since the February lows, and institutional buyers like Strategy have used the dip aggressively. This is consistent with the “digital gold” narrative gaining real-world traction with institutional money.
The Strait of Hormuz situation is not resolved. Iran has stated it will not reopen the strait until the US blockade ends. The US blockade remains in place. This means:
For practical trading, this means keeping an eye on oil prices as a leading indicator. When crude spikes, NQ and ES will likely face headwinds. When oil falls, risk appetite typically improves.
You don’t need to predict geopolitics. You just need to understand the mechanism so you’re not caught off guard when the headlines hit.
This article is for educational purposes only. All price data as of 24 April 2026.
If you've been watching NQ, ES or Bitcoin this year and wondering why price action has been so unpredictable, the answer isn't in your charts. It's in the Strait of Hormuz.
This article breaks down exactly what's happened, why it matters to traders, and how to think about geopolitical risk in your decision-making — without needing a politics degree.
The Strait of Hormuz is a narrow waterway between Iran and Oman, roughly 33 miles wide at its narrowest point. It is the only sea route out of the Persian Gulf — and through it passes approximately 20% of all global oil consumption. Saudi Arabia, UAE, Kuwait, Iraq and Qatar all export their oil through this single chokepoint.
When it's open, the world's energy supply flows freely. When it's disrupted, oil prices spike globally — and that ripple effect reaches every financial market on the planet within hours.
On 28 February 2026, US and Israeli military forces launched strikes against Iranian nuclear facilities. Iran responded by announcing it would close the Strait of Hormuz to all commercial traffic.
The effect on energy markets was immediate and severe. Brent crude, which had been trading around $70 per barrel, surged to a peak above $119 per barrel within weeks. As of today it sits around $103/barrel — still historically elevated even after a partial ceasefire.
This is the question most newer traders ask — and it's a great one. Here's the chain of cause and effect:
This is why NQ dropped thousands of points after the conflict began, despite no change in US tech company earnings. The market was repricing risk and future cash flows — not reacting to the tech sector itself.
Two reasons: ceasefire talks, and the realisation that the worst-case scenario wasn't playing out.
President Trump announced a ceasefire in mid-April and extended it indefinitely this week. Each ceasefire headline has been a green light for risk assets to rally — because it reduces the "oil stays at $119 forever" scenario that markets were pricing in during the panic.
Markets don't just react to what's happening. They react to what they expect to happen — and then correct when reality differs from those expectations.
Bitcoin's relationship with geopolitical risk is more nuanced than equities. In theory, BTC is meant to be a hedge against exactly this kind of situation — dollar debasement risk, inflation, geopolitical instability. In practice, during the initial panic, BTC sold off alongside everything else as traders raised cash.
But the recovery pattern has been interesting. BTC has outperformed the Nasdaq on a relative basis since the February lows, and institutional buyers like Strategy have used the dip aggressively. This is consistent with the "digital gold" narrative gaining real-world traction with institutional money.
The Strait of Hormuz situation is not resolved. Iran has stated it will not reopen the strait until the US blockade ends. The US blockade remains in place. This means:
For practical trading, this means keeping an eye on oil prices as a leading indicator. When crude spikes, NQ and ES will likely face headwinds. When oil falls, risk appetite typically improves.
You don't need to predict geopolitics. You just need to understand the mechanism so you're not caught off guard when the headlines hit.
This article is for educational purposes only. All price data as of 24 April 2026.