As the US-Israel-Iran conflict escalates following February 28 strikes and weekend retaliation—including the reported death of Ayatollah Khamenei—the Strait of Hormuz has closed, pushing oil prices to new highs and intensifying market volatility. Updated casualties exceed 740, while analysts predict inflation spikes and delayed rate cuts. Mexico sees sharp peso depreciation and stock plunges.
Building on the initial US and Israeli attacks on Iran starting February 28, 2026, and Iran's retaliatory threats over the March 1-2 weekend—including reported strikes killing Supreme Leader Ayatollah Ali Khamenei—the Strait of Hormuz, vital for 20% of global crude, is now closed. Casualty figures have risen sharply: Iran's Red Crescent reports at least 787 deaths, while HRANA cites 742 civilians, including 176 minors.
Oil prices continued surging: Mexico's Mix reached $70.32 per barrel (+5.54%), Brent $81.94 (+5.40%), and WTI $74.56 (+4.68%)—levels unseen since June 2025. Morgan Stanley warns prolonged Ormuz disruptions could elevate gas prices, fuel inflation, and curb consumption. Minneapolis Fed President Neel Kashkari noted: “With these geopolitical events, we need more data to gauge inflation impacts and duration.”
Analysts forecast broader effects: Capital Economics' William Jackson sees Brent at $100 adding 0.6-0.7 points to global inflation and slowing monetary easing. Oxford Economics' Ryan Sweet predicts 0.3-0.4 points higher inflation in the US/Eurozone in 2026, with 0.1-point global GDP shave from moderate disruptions.
Markets extended losses: Wall Street's Nasdaq fell 1.02%, S&P 500 0.94%, Dow 0.83%. Mexico's S&P/BMV IPC dropped 3.04% to 68,436 points, FTSE-BIVA 2.96% to 1,358; the peso weakened 2.03% to 17.6367/USD—worst since April 2025 per Banxico.
For Pemex, the Mix price tops 2026 Hacienda estimates by 28%, though January exports were just 294k barrels/day (down 44.6% YoY), yielding $493M. Banco Base's Gabriela Siller links dollar strength to risk aversion over oil/inflation risks.
