A potential agreement on the Strait of Hormuz could reduce geopolitical tensions and lower oil price risk premiums.
US Treasury Secretary Scott Bessent indicated a deal to stabilize shipping through the Strait of Hormuz may be finalized within days. Negotiations are advancing rapidly, with an agreement possible as soon as Tuesday or Wednesday, according to comments in a CNBC interview.
Recent geopolitical risks have driven volatility in oil and financial markets, though vessel traffic through the strait has continued despite heightened tensions. Bessent suggested a deal would ease supply disruption concerns and support global trade flows, potentially lowering energy prices.
Markets could see a relief rally if tensions ease, with Bessent noting that reduced risk premiums in oil prices may boost risk assets. The Treasury Secretary expressed confidence that an agreement would help calm investor sentiment.