The resumption of tit-for-tat attacks between the US and Iran has eroded market confidence in a normalization of flows through the Strait of Hormuz (SoH). Geopolitically, the biggest question remains the most consequential: who will gain control over the future of the Strait of Hormuz? For now, the ongoing stalemate is keeping markets on edge: Iran sees upcoming US elections as its window to maximize leverage and set the future boundary conditions for navigation via the SoH; Israel’s maximalist goals remain unfulfilled; and the global economy is confronting its worst oil products crisis in history, with cracks now at record levels – a reminder that the SoH crisis is as much a products problem as a crude one.

Regardless of how the geopolitical endgame unfolds, a return to the pre-war system for crude sales and pricing looks remote. Confidence in the stability of flows through the SoH lay at the heart of the pre-war mechanisms but has now been shattered. (CONTINUED - 2312 WORDS)

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