A person points to a page on the Marine Traffic website showing commercial vessel traffic at the edge of the Strait of Hormuz near the Iranian coast, in Paris, March 4, 2026.
Julian De Rosa | AFP | Getty Images
Fifty days into the US-Israel war on Iran, tensions have risen again after clashes in the Gulf caused prolonged transport disruptions and called into question a fragile ceasefire that is set to expire this week.
On Friday, Iran declared the Strait of Hormuz fully open to commercial traffic, and oil prices fell by more than 10%. Hopes for a full opening of the artery quickly collapsed by Saturday as Iran reimposed the chokepoint closure after President Donald Trump refused to lift the US blockade of Iranian ports.
After a brief transport attempt on Saturday, shipping traffic in the Gulf was again brought to a standstill, with ships forced to retreat after being hit by artillery fire mid-way through the route.
On Sunday, the US Navy shelled and captured an Iranian container ship in the Gulf of Oman. President Trump called Iran’s actions over the weekend a “total violation” of the cease-fire agreement and renewed his threat to attack Iranian power plants and bridges if Iran rejects the deal.
For markets, it is a reminder of the fragility of the two-week ceasefire, with a deal that could bring a permanent end to the war still far from finalized.
Oil prices rose while US stock futures fell as the US and Iran teetered on the brink of renewed conflict. West Texas Intermediate Futures It soared more than 6% to $89 per barrel just after midnight on Monday, with international indicators also brent It rose 5.6% to $95.50 per barrel.
Rory Johnston, founder of Commodity Context, said: “Saturday was the most intense day in the Channel since this crisis began, and things don’t look to be getting any better.”
“It keeps going down like this and it continues to look like we’re finally going to get it, but football, Lucy pulled it away and we’re back to where we started,” Johnston said Monday on CNBC’s “Squawk Box Asia.”
“The Strait is still not flowing, and 13 million barrels a day of production remains suspended. If this situation continues, we will lose more Strait every day,” said Johnston, who is also a lecturer at the University of Toronto’s Munk School of International Affairs and Public Policy.
best realistic results
The ceasefire agreement expires on Tuesday, so much depends on whether the United States and Iran meet for a second round of peace talks in Pakistan later this week.
President Trump said U.S. and Iranian negotiators would resume talks in Islamabad on Monday. However, Iran has denied participation in the talks, calling the US’ “excessive demands, unrealistic expectations, and constant changes in position” and the ongoing blockade a violation of the ceasefire.
The first round of talks between Vice President J.D. Vance and Iranian Foreign Minister Abbas Araghchi on April 12 did not result in an agreement. The US government reportedly proposed a 20-year moratorium on Iran’s uranium enrichment, but Iranian leaders rejected this request and insisted on five years.
We won’t be able to reach a solution until the U.S. negotiating team dispels the misconception that military victory equals strategic advantage.
Alan Eyre
Distinguished Diplomacy Fellow at the Middle East Institute
Alan Eyre, a distinguished diplomacy fellow at the Middle East Institute and a former member of the US team that negotiated the 2015 Iran nuclear deal, said the fundamental differences between the US and Iran run deeper than the current impasse.
“The US side is not really focused on the negotiations themselves. What they are waiting for is Iran’s surrender,” Eyre said. “Unless the U.S. negotiating team dispels the misconception that military victory equates to strategic advantage, we will not be able to reach a solution.”
Mr Eyre warned that recent flashpoints risked making the conflict worse in the short term. “There’s an escalating trend here where both sides could escalate and get back into a firefight, and that’s not what anyone wants.”
Eyre added that there is still a chance that productive negotiations could take place in Islamabad, but “unfortunately, it is more likely to go in the other direction, which is a resumption of hostilities.”
high-stakes gamble
The economic cost of the conflict has increased as the Strait of Hormuz, which normally carries about a fifth of the world’s oil supplies, has been effectively closed for nearly two months.
“This crisis is one of lost time and lost production,” Johnston said, estimating the supply of crude oil, condensate and liquid natural gas to be around 13 million barrels per day.
“The cumulative impact has already exceeded 500 million barrels,” he said, warning that even the imminent announcement of a deal would not immediately reverse the damage.
Even if a deal is reached, experts have warned that it could take months to replace supplies lost in recent weeks of shutdowns, potentially prolonging high oil prices.
“If we actually open the straits, we’ll probably see an immediate drop of another $10 to $20 a barrel due to speculative hot money. But at the end of the day, we’re going to have a fire sale on the first day, and then we’re going to see it go higher, maybe to $80 or $90, to reflect the ongoing shortage.”
According to LSEG data, oil prices have soared more than 30% since the outbreak of the war, with Brent crude at one point exceeding $110 per barrel for the first time in about four years, but hopes for an end to the situation have since waned.
More than 500 million barrels of crude oil and condensate have left the global market, according to Kpler data. This is the largest energy supply disruption in modern history.
Despite the severity of the energy disruption, U.S. stock markets have remained largely resilient as investors have dismissed the dispute as a temporary matter that will be resolved relatively quickly.
However, Vishnu Varasan, head of macro research at Mizuho Bank, cautioned that optimism may be premature. “No matter what deal is struck, we cannot get too excited prematurely, because the lingering fallout means we will not be able to get out of this situation quickly.”
The International Monetary Fund warned on Tuesday that even if the ceasefire holds, global economic growth will inevitably suffer, as uncertainty over the Strait of Hormuz remains a persistent factor pushing up energy costs and inflation.
“It’s clear we’re not going to go back to a Goldilocks scenario,” said Brian Arcies, portfolio manager at Food Asset Management, referring to a scenario of stable growth and low inflation. He said the longer the Strait remains closed, the greater the risk to the global economy, but the actual extent of the damage could vary “day to day, week to week.”
