The Strait reopens; how energy markets are adapting to war

Iran’s announcement that the Strait of Hormuz is open to commercial vessels for the duration of the Israel-Lebanon ceasefire has led to a slump in oil prices and offers a path to the resumption of energy flows consistent with our baseline forecast. At first glance, the nine days left on the ceasefire offers only a narrow window of opportunity for oil tankers to navigate the Strait, load up and exit. That suggests that the number of vessels entering the Strait may not return to pre-war norms yet, but it does offer an opportunity for trapped tankers to leave.