Key Takeaways
- Iran's IRGC has imposed a "New Order" on the Strait of Hormuz, banning military vessels and requiring all civilian transits to obtain explicit permission.
- At least five Iran-linked oil tankers diverted or reversed course on Friday to avoid interception by the US Navy in international waters.
- The US active rig count fell to 543 this week, according to Baker Hughes (BKR), led by a decline in natural gas drilling.
- The New York Fed raised its Q2 GDP Nowcast to 2.76%, suggesting resilient economic growth despite geopolitical volatility.
The Iranian Revolutionary Guard Corps (IRGC) Navy Command announced a restrictive "new order" for the Strait of Hormuz on Friday, significantly escalating tensions in the world’s most critical maritime chokepoint. Under the new mandate, military vessels are strictly prohibited from transiting the strait, and all civilian vessels must use Iran-designated routes only after receiving formal permission from the IRGC.
The Iranian Foreign Ministry warned that Tehran will "reciprocate" if the current US naval blockade of the region continues. This announcement follows reports that the US Navy has established maritime superiority, with CENTCOM claiming to have halted the majority of maritime trade in and out of Iran within a 36-hour window.
According to The Wall Street Journal, at least five Iran-linked tankers—including the Suezmax Kariz and the VLCC Andromeda—altered their courses on Friday to avoid potential seizure. These vessels, carrying nearly 3 million barrels of crude oil, were originally bound for Malaysia and Singapore but diverted near Sri Lanka and the Indian Ocean as US Navy guided-missile destroyers patrolled the area.
Internal political friction in Tehran has surfaced following the IRGC's declaration. Iranian state media criticized a tweet from Foreign Minister Abbas Araghchi, which suggested the strait was "completely open" during a ceasefire, claiming his comments handed a "victory" to US President Donald Trump. Diplomatic sources indicate that while discussions to end the conflict are ongoing, they remain preliminary with no formal agreements reached.
In the energy sector, Baker Hughes (BKR) reported that the US total rig count fell by 2 to 543 for the week ending April 17. The decline was driven primarily by natural gas rigs, which dropped by 2 to a total of 125, while the oil rig count saw a marginal decrease of 1 to 410. Market analysts suggest the continued contraction in drilling activity reflects cautious capital expenditure despite the spike in global oil prices.
On the economic front, the New York Fed updated its GDP Nowcast, maintaining the Q1 estimate at 2.31%. However, the tracker for Q2 GDP was revised upward to 2.76%, up from the previous 2.60%. This upward revision comes as the market weighs the impact of Middle East instability against strong domestic manufacturing and labor data.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.