The Lag Between an Iran Deal and Lower Oil Prices

A claimed deal to reopen the Strait of Hormuz remains unfinalized, with limited details and conflicting statements from U.S. and Iranian sources. Even with an agreement, restoring normal ship traffic will take time and may not quickly ease energy markets. Vessels cannot simply depart; they must know viable routes and whether underwater mines still pose risks. Seafarers need credible assurances of safe passage before commodities such as oil, fertilizer, helium, and aluminum can move to ports. Shipping companies and energy traders must also trust that peace will endure, especially given prior false claims of breakthroughs and the continued reality of ongoing conflict and military activity.

"Nothing has been finalized, and details are sparse; the White House claimed that a draft agreement released by Iranian state media today was a "complete fabrication." But even if an agreement does emerge, reestablishing normal ship traffic through the strait will take time-and energy markets won't necessarily be quick to respond."

"Getting vessels through the strait isn't simply a matter of telling captains to start their engines. Before they can set sail, they need to know what routes they can reasonably take, and whether they might trigger any of the underwater mines still reportedly lingering in the area. Seafarers will need assurances of safe passage before oil, fertilizer, helium, aluminum, and other commodities can actually start to reach their ports and relieve global markets."

"First, both shipping companies and energy traders will need to be convinced of a lasting peace that protects travel through the strait. Trump has falsely announced breakthroughs before: During the past three months of war, the president has claimed repeatedly that the conflict is effectively over and that much of Iran's military capacity has been destroyed. These statements are directly contradicted by the facts: The war continues-the U.S. launched strikes as recently as Monday-and Iran has proved its resilience."

"Last month, after Iran agreed to reopen the waterway amid a tentative cease-fire, Trump wrote on social media that Iran had "agreed to never close the Strait of Hormuz again," and that it would "no longer be used as a weapon against""

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