In April 2026, Iran's closure of the Strait of Hormuz triggered a sharp surge in global oil prices, pushing WTI crude above $112 per barrel. This disruption, compounded by a U.S. naval blockade threatening to cut 2 million barrels per day, caused U.S. gasoline prices to rise to $4.11 per gallon and sparked a market alert from Goldman Sachs warning of a significant S&P 500 decline. The Federal Reserve now faces a tough choice between controlling inflation fueled by soaring energy costs and avoiding an economic slowdown. Meanwhile, higher energy prices are squeezing corporate earnings and increasing stagflation risks, all amid rising defense spending and fiscal deficits that further complicate policy decisions.