WTI crude oil is now up 10% and has risen above the highs from Asian trading.

Britain’s Defence Secretary says “it’s clear Iran is likely laying mines” in the Strait of Hormuz.

That’s an odd phrasing that indicates both clarity and uncertainty. I guess we won’t really know if there are mines until:

1) Iran says so

2) A ship hits them

3) Someone else discovers and clears them

Also importantly, Defense Minister Healey said mine clearance is near impossible during conflict and the best way to reopen the shipping route is to de-escalate. So overall, I take this as a call to de-escalate.

Further hurting equity market is that Fed rate cut pricing is down to 24 bps for the year. It was at 60 bps before the war started and we’ve got a poor non-farm payrolls report since then. It’s an indication that markets are giving up the idea that this will be a short conflict. The dollar index has now broken Monday’s high.

With the latest move in oil, we’re seeing fresh lows of AUD, NZD and CAD. Previously they were holding up well in the conflict and AUD/USD this week touched a multi-year high but the downsides for global growth in a prolonged conflict are now starting to bite.

Again, I find the public call for de-escalation to be what’s most important here. In private, the US is likely getting tremendous pressure from allies to find an off-ramp for the conflict. The US itself has some levers to pull for domestic oil prices but most other countries don’t.

Brazil’s Lula just hit the wires saying “oil prices are out of control.”

It’s a precarious moment right now but it can all change with one tweet from Trump. Unfortunately, right now he’s talking about Iran’s soccer team not coming to the US-hosted World Cup.

This article was written by Adam Button at investinglive.com.