Thirteen days into the war in Iran, the Strait of Hormuz remains effectively closed to commercial shipping. Three more foreign vessels were struck in the Persian Gulf overnight. A container ship was hit approximately 35 nautical miles north of Jebel Ali near Dubai, causing a small fire. WTI futures are trading roughly 7% higher around $94 per barrel. Brent has advanced 7% to near $99, briefly touching $100 again.

The market response is no longer a repricing event. It is a structural reordering.

Across global equity markets, country ETF performance since February 27 now maps almost perfectly onto a single variable: energy trade balance as a percentage of GDP. The divide between energy exporters and energy importers — flat versus deeply negative — is the clearest market signal in global equities right now, and it is widening by the day.

The Hormuz Escalation: What Changed Overnigh

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The escalation accelerated sharply on Thursday morning. Iran's new Supreme Leader Mojtaba Khamenei — appointed March 9 following the death of Ali Khamenei — issued his first public statement, declaring that the closure of the Strait of Hormuz "should be used as leverage" and that attacks on Gulf shipping would continue until the U.S. closes all its regional military bases. BNN Bloomberg reported Khamenei called for "retaliation for every death," removing any near-term ambiguity about the regime's intentions.

The statement landed like a hammer on markets already priced for a short conflict. In one sentence, Iran's new leadership signaled that the Hormuz blockade is not a tactical tool to be traded away in early negotiations — it is a strategic instrument to be held indefinitely.

U.S. Energy Secretary Chris Wright told CNBC the Navy is not yet ready to escort tankers through the strait: "It'll happen relatively soon but it can't happen now." That admission — that the world's most powerful military cannot yet guarantee safe passage through a 21-mile-wide chokepoint carrying 40% of global seaborne oil — immediately repriced the duration premium in crude.

President Trump posted on social media: "The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money. BUT, of far greater importance to me, as President, is stopping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World. I won't ever let that happen!"

The post confirmed two things simultaneously: that the U.S. administration is not indifferent to higher oil prices domestically, and that the conflict's resolution is tied to a nuclear red line — not an oil price threshold. That framing extends the expected duration of the crisis materially.

Goldman Sachs: $98 Base Case, $110 Upsid

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Goldman Sachs moved its Brent forecasts sharply higher on Thursday, extending its assumed duration of low Strait of Hormuz flows from 10 days to 21 days before a 30-day gradual recovery.

Base case: Brent to average $98 in March and April — up roughly 40% from the 2025 average — before declining to $71 by Q4 2026.

Upside risk scenario: If Hormuz flows are disrupted for a full month, Brent averages $110 in March and April before gradually falling to $76 by late 2026.

Goldman's commodity desk estimated the hit to Persian Gulf exports at 16.2 million barrels per day, warning that "daily oil prices would exceed the 2008 peak if Strait of Hormuz flows were to remain depressed through March." The bank noted that the non-linear relationship between disruption length and prices means "the two-sided risks to our price forecast remain skewed to the upside on net."

Goldman also cut its U.S. growth forecast as markets brace for the inflationary and demand-destruction impact of sustained triple-digit crude.

The Country ETF Divide: Full Scorecard Since Feb. 2

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The performance data as of March 12, 10:30 a.m. ET tells the story with clinical precision. Out of 39 tracked country ETFs, just three are positive since the start of the crisis. Every other market is in the red — and the depth of those losses correlates almost exactly with each country's structural dependence on imported energy.

Markets Holding Positive or Fla

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Three markets. Three very different stories. Saudi Arabia and Norway are collecting the energy exporter windfall directly — higher fiscal revenues, stronger trade balances, improving corporate earnings in their dominant energy sectors. Israel is a special case: a defense and reconstruction economy where the wartime spending cycle partially offsets the energy import burden.

The Worst Performers: Energy Importers Under Maximum Pressur

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South Korea's iShares MSCI South Korea ETF (EWY) has become the clearest casualty of the crisis, down 16.7% since February 27. That loss comes on top of the fact that Korea was the world's best-performing equity market year-to-date — the speed and severity of the reversal reflects just how structurally exposed Korea is to Middle Eastern energy supply.

Reuters reported on March 9 that South Korea imposed domestic fuel price caps for the first time in 30 years, as President Lee Jae Myung moved to shield the economy from the energy shock. CNBC noted it was "the first fuel price cap in 30 years," with Seoul simultaneously exploring energy import diversification. These emergency measures signal the depth of the exposure — and they also compress refining and distribution margins in the domestic economy, creating additional headwinds for Korean corporates beyond the raw energy cost.

The Broad European Damag

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Continental Europe is absorbing a double shock: direct energy import exposure and the secondary impact on its industrial base. Germany's iShares MSCI Germany ETF (EWG) is down 9.2% since the crisis began, compounding its existing -4.0% year-to-date position to bring its 2026 loss to approximately 13% in total. German manufacturing — the backbone of the DAX — is among the most energy-intensive in the developed world.

Japan's iShares MSCI Japan ETF (EWJ) has dropped 8.6% since February 27, despite its year-to-date resilience. Japan imports nearly 90% of its energy and has no alternative to Middle Eastern crude at scale. The Atlantic Council reported that Japan, along with South Korea, China and Taiwan, would each be "significantly affected by a collapse in energy through the Strait of Hormuz."

Why The Divide Widens From Her

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The Goldman Sachs scenario framework is the clearest guide to what happens next. In the base case — 21 days of depressed Hormuz flows before a 30-day gradual recovery — the market is pricing a prolonged shock that has not yet fully transmitted into corporate earnings estimates. That transmission lag is the next phase of the trade.

Energy importer companies have not yet revised their Q1 and Q2 earnings guidance to reflect $98–$110 Brent. When they do — in the coming weeks — the downward pressure on markets like South Korea, Germany, Japan and Thailand will have a fundamental earnings driver, not just a sentiment discount.

Energy exporter companies — Petrobras in Brazil, Equinor in Norway, Saudi Aramco's supply chain in KSA — are in the process of upgrading earnings expectations. Petrobras's CFO has already flagged the potential for extra dividends. The fiscal positions of Saudi Arabia and Norway are improving in real time with every dollar of elevated crude.

The longer the Hormuz closure runs, the more these earnings divergences crystallize. Goldman's non-linear warning — that prices are skewed to the upside the longer the disruption lasts — applies with equal force to the country ETF performance gap.

The Markets Still Underpricing the Shoc

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Several markets appear to have not yet fully priced the energy trade balance impact. Colombia's Global X MSCI Colombia ETF (COLO) is down 1.8% since February 27 despite being a net oil exporter — suggesting domestic political risk or currency factors are temporarily offsetting the energy tailwind. Canada's iShares MSCI Canada ETF (EWC) is down 2.9% despite significant oil sands exposure, reflecting broader risk-off sentiment in North American equities rather than fundamental deterioration.

On the importer side, India's iShares MSCI India ETF (INDA) is down 6.8% — relatively contained given that India imports approximately 85% of its crude requirements. The New York Times reported that India, along with other Asian economies, has been scrambling to secure alternative supply routes and strategic stockpiles. Reuters noted Iran agreed to allow Indian-flagged tankers through the strait — a bilateral carve-out that partially explains India's relative resilience versus Korea and Japan, which have no such arrangement.

Key Takeaway

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The Hormuz crisis has moved beyond a geopolitical shock and into a structural market regime. Goldman Sachs's 21-day assumption for depressed flows — with upside risks running to a full month or more — is the central scenario investors are now pricing.

The performance data since February 27 is unambiguous: energy trade balance as a percentage of GDP is the dominant driver of country ETF returns. Three markets are positive. The rest are negative, with losses scaling in near-perfect proportion to each country's energy import dependence.

South Korea's 16.7% decline from the start of the crisis is the starkest individual signal — the year's previous leader becoming its most dramatic casualty. Norway and Saudi Arabia, flat since the conflict began, are collecting a structural windfall that compounds with every day the Strait remains closed.

Monitor the full real-time picture at the Iran War Market Monitor, which tracks every country ETF's performance since February 27 against its energy trade balance as % of GDP.

FA

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Why is South Korea the worst-performing country ETF since the crisis began?

South Korea imports approximately 93% of its energy needs and has no meaningful domestic oil production. Its largest companies — Samsung Electronics and SK Hynix — operate some of the world's most energy-intensive manufacturing facilities. The government imposed domestic fuel price caps for the first time in 30 years on March 9, signaling the depth of the structural exposure. The iShares MSCI South Korea ETF (EWY) has lost 16.7% since February 27.

Why are Norway and Saudi Arabia the only ETFs holding positive territory?

Both are structural energy exporters whose fiscal revenues, trade balances and corporate earnings improve mechanically with higher oil prices. The iShares MSCI Norway ETF (ENOR) and iShares MSCI Saudi Arabia ETF (KSA) benefit from the same supply shock that is devastating energy importers — they sit on the opposite side of the energy trade balance equation.

What does Goldman Sachs's $98–$110 Brent forecast mean for country ETFs?

In Goldman's base case, Brent averages $98 in March and April. In the upside scenario, it averages $110. Either scenario prolongs the earnings pressure on energy importers — South Korea, Japan, Germany, Thailand — while extending the windfall for exporters. Goldman warned that if Hormuz flows remain depressed through March, oil could exceed the 2008 peak.

What is Iran's new Supreme Leader's position on the Hormuz closure?

Mojtaba Khamenei, appointed March 9, issued his first public statement on March 12 calling the Hormuz closure "leverage" to be used against the U.S. and demanding the closure of all American military bases in the region as a condition for de-escalation. That position significantly reduces the probability of a near-term diplomatic resolution.

Where can the full country ETF performance ranking since February 27 be tracked?

The Iran War Market Monitor tracks all 39 country ETFs by performance since February 27 alongside each country's energy trade balance as % of GDP. Use the Compare Tool to build custom head-to-head comparisons from any start date.