WTI crude closed Friday at $69.94 a barrel, its lowest level since February 27, the day before Iran's closure of the Strait of Hormuz triggered the largest oil supply shock markets have priced in years. Four months, a $117.63 peak, and a war that briefly looked uncontainable later, oil is back almost exactly where it started.
Gold has made the same trip. Friday's close near $4,040 an ounce left bullion down for a fourth consecutive week and roughly 20% below the record set in January, before the conflict began. The two assets that carried HDQ's desks through February, March and April have both round-tripped. The story they were telling is over.
What has not round-tripped is the Canadian dollar. USD/CAD touched 1.4236 this week, a fresh high for the available 2026 trading record, and the reason has almost nothing to do with Canada.
The War Premium Is Gone
WTI has now retraced the entire four-month war premium, closing Friday within a percentage point of the level that prevailed before the Strait of Hormuz closed in February.
WTI traded as high as $117.63 in late March before Saudi Arabias Ras Tanura ramp up and accelerating Strait of Hormuz transits pulled crude back toward pre-war levels by June. The seven points plotted are independently dated price events rather than a uniform weekly series.
The mechanics of the round trip are straightforward. Saudi Arabia began loading tankers again at its Ras Tanura terminal this week, and the United Arab Emirates, Kuwait and Qatar are all adding supply despite a shortage of tankers to carry it. Transit volumes through the Strait of Hormuz reached their fastest pace since the war began, even after a vessel was struck by an unidentified projectile off the coast of Oman on Wednesday. The White House confirmed the strait remains open regardless.
Gold's decline tracks the same de-escalation, with one addition: a US Federal Reserve under new chair Kevin Warsh that has turned hawkish on its own domestic inflation problem, lifting the US dollar and making non-yielding gold less attractive regardless of what is happening in the Gulf.
Two Central Banks, Two Inflation Stories
That Fed move is the piece that does not fit the round-trip narrative, and it is the reason the loonie has not recovered the way oil and gold have. The US core PCE measure came in at 4.1% year over year in May, and the Fed responded by raising its own 2026 inflation projections rather than lowering them. Markets are now pricing close to three US rate hikes before year end.
Canada's inflation problem looks superficially similar and is structurally nothing alike. Headline CPI jumped to 3.2% in May, the fastest pace since December 2023, but Statistics Canada attributed nearly all of the acceleration to a 33.2% year over year jump in gasoline prices. Strip out gas, and Canadian inflation was running at 2.2%. The Bank of Canada's own core measures, trim and median, sat at 2.0% and 2.1% respectively, exactly where Governor Tiff Macklem wants them.
This matters because the Bank's entire hike scenario, the one it has kept on the table since April, was conditional on energy prices staying elevated long enough to bleed into broader prices. Oil at $69.94 removes that condition. The gasoline-driven spike in the May CPI print is the last reading that can plausibly carry the war's fingerprints; barring a fresh shock, the June number due July 20 should show the deceleration arriving in full as the math of a $70 oil price replaces the math of a $100 one. The Fed has a genuine domestic inflation problem. The Bank of Canada's version of that problem just lost its primary input.
The Divergence That Matters Next
The TSX and the Nasdaq took the same war and produced opposite weeks, the widest split between the two indexes since the conflict began.
The Nasdaqs decline was led by chip and memory names following reports that OpenAI may delay its IPO; the TSXs gain came from financials and gold miners offsetting a weaker energy sub-index. Source: CNBC, Trading Economics.
Energy stocks did not save the TSX this week; if anything they were a drag, with the energy sub-index down nearly 4% as crude fell. What held the composite up was breadth elsewhere: financials and gold miners absorbed the energy weakness while a US-led selloff in chip and memory names, on fresh reports that OpenAI may delay its IPO, dragged the Nasdaq through its fifth straight losing session.
That is the structural point worth carrying into the second half of the year. The TSX's relative insulation from the AI trade, a frequent footnote during the war, becomes the headline once the war stops being the variable that moves markets. The desk that mattered most this week was not Geopolitical. It was the one explaining why Canadian portfolios are exposed to a US monetary story they did not create, and structurally protected from a US equity story they were never that exposed to in the first place.