A ceasefire was declared on April 8. Two weeks, Pakistan-brokered, conditional on the reopening of the Strait of Hormuz.
A ceasefire was declared on April 8. Two weeks, Pakistan-brokered, conditional on the reopening of the Strait of Hormuz.
Don't mistake that for peace.
Iran's condition for any real deal is the lifting of the US naval blockade — which the US imposed on April 13 after the Islamabad talks collapsed. The US condition is the reopening of the Strait. Neither side has moved. The ceasefire halted US strikes on Iran. It did nothing for the 2,000 vessels and 20,000 seafarers still stranded in the Persian Gulf. The Strait remains effectively closed. Iran is still controlling who passes, demanding tolls in excess of $1 million per ship, and threatening any vessel that doesn't receive explicit permission.
The operating context
Oil surged past $100 per barrel on March 8 for the first time in four years. At $100 oil, Iran is collecting a structural economic windfall on every barrel that gets rerouted around the Cape. At $100 oil, why would either side blink? The financial incentive to continue the stalemate is asymmetric. Iran is a major oil producer. The longer the disruption, the higher the price, the more revenue for every barrel that moves through sanctioned or grey-market channels.
Look at what's actually moving: roughly 5% of the 3,000 vessels that normally transit the Strait each month are doing so. The rest are either stranded, rerouted, or waiting. Abu Dhabi National Oil Company CEO Sultan Al Jaber confirmed publicly that 230 loaded oil tankers are waiting inside the Gulf alone. The IEA estimates it would take 8–12 weeks to clear the backlog even if the Strait reopened tomorrow.
The paper market is pricing a ceasefire. The physical market is pricing a closed waterway that may not reopen before summer. These two markets cannot both be right. One of them is going to violently correct.
What changes the decision
I know which one I trust. I've spent 20 years in the physical world. Paper never moves cargo. Ships do. And the ships are still not moving.
Predictive Intelligence. Human Insight. — Lars P.S. China and Russia vetoed a UN Security Council resolution demanding the end of Iranian attacks on Gulf states. The geopolitics have moved well beyond the ceasefire paperwork.