Last week's oil selloff assumed a Hormuz deal was close. Iran's weekend preconditions confirm it is not, and the chain runs straight back to the Bank of Canada's inflation math.

Markets have priced steady de-escalation. A nearly identical arrangement collapsed three weeks ago, and Wednesday brought both a Houthi tanker attack and an Iranian statement that the strait stays closed until the US ends its blockade.

Fourteen vessels crossed the strait Wednesday without a political settlement behind them. The gap between operational improvement and an actual deal is where the risk to Canadian energy portfolios is sitting right now.

Wednesday's diplomatic track, the one this desk flagged as the base case two sessions ago, did not survive the week. WTI's climb back above $85 is the market's first read on whether this round of escalation resolves like the last one or does not.

Every conventional signal today read hawkish: stocks fell, yields rose, volatility spiked. The one market that actually prices the Fed's next move went the other way.

Every missile Iran fired at US forces overnight was shot down, a familiar outcome after five months of war. What changed was Saudi Arabia joining US strikes in Iraq, a shift from broker to combatant with a direct mechanism into Canadian energy portfolios.

Houthi forces claimed a strike on Saudi Arabia's East-West Pipeline, the route built to move crude around the Strait of Hormuz entirely, the same day Oman proposed a formal Hormuz shipping mechanism. The base case still points to de-escalation, but the tail risk just moved to different infrastructure.

Houthi missiles struck two Aramco refining complexes Saturday, widening a war that had mostly stayed confined to Iran and its immediate coastline. Markets are pricing a different signal instead: a quiet pause between the United States and Iran that touches a far larger share of global oil supply.

Houthi missiles struck two Saudi Aramco refineries Saturday, the first direct hit on the kingdom's oil infrastructure in four years. The bigger price move came from something with no pictures at all: a quiet, unannounced pause in US strikes on Iran.

Two Saudi tankers struck in the Red Sea push Brent past $100 for the first time since May. The muted reaction across the TSX and gold suggests markets still treat this as tail risk, not the base case.

Bab el-Mandeb traffic carrying Saudi crude surged more than tenfold this year as producers routed around Strait of Hormuz risk. A new Houthi blockade threat is closing that alternative just as Iran escalates attacks on the original chokepoint.

Yemen's Houthis have declared a maritime embargo against Saudi Arabia, threatening the Red Sea export route Riyadh has used to offset the Strait of Hormuz disruption, even as markets show their first real mediation signal in over a week.

For four months, Iran's leverage was a shipping lane. Wednesday's threat to halt energy exports from the entire region, paired with a strike that hit actual production infrastructure, changes the mechanism connecting this war to Canadian portfolios, even though the base case has not changed yet.

A fourth wave of US strikes and Iran's retaliation against Bahrain, Kuwait, and Jordan pushed Brent above 79 dollars Monday. Whether this is the escalation that finally sustains a Hormuz disruption or another cycle the market fades within weeks depends on data the headlines are not capturing.

Iran's Revolutionary Guard fired on two commercial vessels in the Strait of Hormuz hours after a one week de-escalation arrangement expired. WTI is still trading near a four month low. That gap between the event and the price is the story.

US-Iran indirect talks in Doha concluded Wednesday with 'positive progress' but no breakthrough. Negotiations are now formally paused until after Khamenei's six-day funeral procession ends July 9. The pause is not a setback. It is the period during which the oil market will price the next round's probability of success.