Crude is pricing in a ceasefire that still looks provisional. After Abu Dhabi’s oil chief said the Strait of Hormuz is ‘not open’, Brent climbed back above $99 a barrel and U.S. crude touched $102.20, a sharp reversal from Wednesday’s drop. The market is not just reacting to headlines; it is trying to decide whether the world’s most important oil chokepoint will actually reopen, and on what terms.
That question is the hinge for everything else. The earlier rally came after oil plunged and stocks surged on the ceasefire, with traders hoping tankers would move again through a route that normally carries about 20 percent of global oil supply. But the fine print remains murky. Iran has indicated it could regulate passage and even charge fees, while one estimate cited by Capital Economics put a $1 to $2 million transit charge at roughly $1 a barrel added to transport costs, enough to squeeze shipping economics without fully blowing them up.
For energy markets, the consequences are immediate: more than 180 tankers were still sitting loaded in the Gulf as of Tuesday, and every day of delay keeps crude, refined products and gas trapped in limbo. That is why the price action has turned so violent, with Brent swinging from a 13.29 percent plunge on Wednesday to a more than 4 percent rebound on Thursday, and European gas also ticking higher after its own whipsaw move. Andrew Bailey, chair of the Financial Stability Board and Bank of England governor, called the war “a very big shock” that has driven “much greater market volatility,” while still arguing the banking system remains resilient.
Equities are treating the ceasefire as a fragile relief rally rather than a clean reset. Asian and European stocks gave back part of Wednesday’s surge, even as U.S. markets held firmer in early trade. Investors are now watching for one thing above all: whether oil and gas actually start flowing through Hormuz again, or whether the route becomes a bargaining chip in a standoff that keeps energy prices, and market nerves, elevated.
