A temporary easing in Middle East tensions briefly lowered oil prices, though sustained recovery hinges on Strait of Hormuz traffic normalization.
Oil prices fell and equities rose after the US and Iran signed a memorandum of understanding to end hostilities, easing geopolitical tensions. The initial market reaction saw a modest decline in crude, reflecting reduced risk premiums in the short term.
Maritime data showed early signs of recovery, with 18 vessels transiting the Strait of Hormuz on June 18, hours after the deal was announced. However, analysts caution that full normalization of shipping routes remains uncertain, with past disruptions lingering for weeks or months.
The agreement’s durability will depend on sustained de-escalation, as any renewed conflict could reverse the recent price relief and reignite supply concerns.