The ceasefire may have cooled the headlines, but it has not reopened the Strait of Hormuz in any meaningful way, and traders are treating that gap as the real story. Abu Dhabi’s oil chief said the waterway is still “not open,” while Brent crude climbed back above $99 a barrel after a violent whipsaw in prices, a reminder that the market is pricing shipping risk, not just diplomacy.
The mechanics are simple and uncomfortable. The strait normally carries about a fifth of the world’s oil and gas, but the article says Iran effectively closed it after the US and Israel began attacks, leaving an estimated 1,400 ships anchored on both sides and around 230 loaded vessels waiting to move. Tehran’s reported ceasefire plan would even allow Iran and Oman to charge up to $2m a ship, which would turn a chokepoint into a toll booth and keep freight costs high even if firing stops.
That tension rippled straight through energy and equity markets. Brent crude rose more than 4 percent on Thursday to above $99 a barrel after falling 13.29 percent on Wednesday, while New York light crude jumped 8 percent to as high as $102.20. UK and European gas futures also bounced, and stocks in Asia and Europe gave back some of Wednesday’s surge as investors recalibrated from ceasefire euphoria to the possibility that the truce does not hold.
Bank of England Governor Andrew Bailey called the Middle East war “a very big shock” and said it had driven “much greater market volatility,” though he added that “the banking system is resilient.” The policy implication is already spilling beyond crude: Bailey said the episode strengthens the economics of renewable energy by pushing the UK to rely less on natural gas. For now, the market is still trading the same question twice, first whether the shooting stops, and then whether tankers can actually move.
