The market’s relief rally came fast, but the damage in energy is not done. President Donald Trump’s two-week ceasefire announcement and the “complete, immediate, and safe opening” of the Strait of Hormuz pushed Brent crude down 12 percent, from $103 a barrel to $91, yet the war’s imprint on pricing is likely to linger. The Economist said almost six weeks of Iranian blockade had trapped roughly 15 percent of global oil output and a fifth of liquefied natural gas supply, leaving traders with a market that is calmer, but not back to normal.
The deeper problem is that a ceasefire does not rebuild supply chains or restore damaged infrastructure overnight. Even after the price drop, the benchmark has been unusually volatile, and Europe’s gas market has already whipsawed, with benchmark prices at one point down 17 percent. That keeps a floor under energy prices and leaves importers, shippers and industrial users exposed to another jolt if the truce frays or the corridor closes again.
For markets, the question is how much of the risk premium sticks. Traders have already had to absorb a sharp repricing, but the article argues the conflict will scar energy markets for a long time, which means the next move may depend less on the ceasefire headline than on whether flows through Hormuz stay open and whether the region’s battered infrastructure can actually support a durable recovery.
