Framework deal eases fears, but risks remain
More than three months after the United States and Israel began their war with Iran, Washington and Tehran have reached a framework agreement intended to create a path toward a more durable end to the conflict.
The announcement has reduced some of the immediate pressure on energy markets, but economists and shipping specialists warn that reopening the Strait of Hormuz will be a gradual process rather than an instant return to normal trade.
Shipping traffic remains extremely limited
President Donald Trump declared that commercial vessels were already moving through the strait and described the route as safe and secure.
However, ship-tracking data showed little evidence of a significant recovery in traffic. According to MarineTraffic, only two vessels with active location systems had exited the waterway since Sunday, one bulk carrier and one tanker.
The strait has been effectively closed to most commercial shipping since February 28, with only a limited number of vessels considered friendly to Iran permitted to pass.
Hundreds of vessels remain trapped
Many ships are still stranded inside the Gulf after the threat of mines, drone attacks and other military action made navigation too dangerous.
Even during the ceasefire, shipping companies were reluctant to move vessels because crews, cargo owners and insurers remained uncertain about the security situation.
The initial priority for many operators will be removing ships that have been stuck in the region rather than immediately restoring full commercial schedules.
Operational problems will delay oil flows
Neil Shearing, group chief economist at Capital Economics, said it was unclear whether the agreement represented a lasting settlement or only a fragile pause in hostilities.
He warned that oil shipments would require time to return to pre-war levels even if vessels received formal assurances of safe passage.
Tankers must be repositioned, production and refining facilities need to restore capacity, and shipping companies must secure affordable insurance before normal operations can resume.
Major shipping groups remain cautious
Maersk, the world’s second-largest shipping company, has five vessels stranded in the Gulf because of the conflict.
The Danish company said it was too early to determine how the agreement would affect logistics and had not yet changed its regional operations.
Hapag-Lloyd has four vessels trapped in the strait. The German group hopes to move them out over the weekend, provided the deal is signed and any remaining sea mines are cleared.
Oil prices retreat from wartime highs
About one-fifth of global oil and liquefied natural gas supplies normally pass through the Strait of Hormuz.
The interruption to shipping pushed Brent crude from just under $70 a barrel before the war to a peak of approximately $120.
Following the announcement of the framework agreement, Brent dropped to about $83.55 a barrel as traders reduced the geopolitical risk premium built into energy prices.
Volatility could continue before Friday
Trump said the waterway would formally reopen once the agreement is signed on Friday.
Florence Schmit, senior energy strategist at Rabobank, warned that oil markets could remain highly volatile before that happens because several important elements have not been confirmed by both sides.
The current arrangement appears to guarantee the opening of the strait for only 60 days. Questions remain about what happens afterward and whether Iran could attempt to introduce fees or new conditions for passage.
Full peace may still be far away
A comprehensive settlement between the United States and Iran could require much longer negotiations.
Schmit said normal shipping and pricing conditions might return by the end of the year if the temporary arrangement develops into a full ceasefire.
Before the conflict, an average of 26 crude oil tankers passed through the strait each day. Reaching that level again would be an important sign that the market had genuinely stabilized.
Brent could fall below $80 temporarily
The positive reaction to the agreement could push Brent below $80 a barrel in the short term as sentiment-driven selling continues.
However, Schmit expects prices could average in the mid-$80 range by the end of the year once traders move beyond the initial headlines and assess actual production, shipping and geopolitical conditions.
The removal of the immediate war premium does not mean the oil market will return automatically to its pre-conflict balance.
Fertiliser costs may ease only gradually
A reopening of Hormuz could also reduce pressure on fertiliser markets, which have been affected by high oil and natural gas costs.
Approximately one-third of internationally traded fertiliser, along with large volumes of gas used to produce nitrogen fertiliser, normally travels through the strait.
Maurizio Carulli, global energy analyst at Quilter Cheviot, said the ceasefire should relieve some immediate pressure, but damaged infrastructure and delayed deliveries will prevent a rapid recovery.
Farmers may receive supplies too late
Several growing seasons are already under way, meaning renewed shipments of nitrogen and phosphate fertilisers may arrive too late for some crops.
That could weaken agricultural output and continue putting pressure on global food prices even after shipping resumes.
Yara, one of the world’s largest fertiliser and crop companies, said uncertainty remained high and warned that farmers could require targeted support to manage continuing volatility.
Jet fuel prices have begun to decline
Jet fuel traded in north-west Europe has already recorded a modest fall.
The price has dropped to approximately $1,033 per tonne, compared with a wartime peak near $1,840. It nevertheless remains well above the pre-conflict level of about $831 per tonne.
Further declines would help airlines reduce costs, although ticket prices may take longer to respond.
Lower energy costs reshape rate expectations
The war affected economies around the world by lifting fuel prices and renewing inflationary pressure.
Central banks faced growing expectations that they would need to keep interest rates high or raise them further to prevent energy costs from spreading across the economy.
In Britain, the Bank of England had been expected to cut rates before the conflict began. Those expectations changed rapidly after oil and gas prices surged.
Markets now expect fewer UK rate increases
Russ Mould, investment director at AJ Bell, said financial markets had recently been pricing in two Bank of England increases by early 2027.
Following the framework agreement, expectations shifted toward a single increase by December, followed by the possibility of unchanged rates during the first half of 2027.
A less restrictive interest-rate outlook could improve business confidence, encourage hiring, support consumer spending and revive activity in the housing market.
The economic damage will outlast the fighting
The agreement has reduced fears of a prolonged closure of one of the world’s most important trade routes and has already lowered oil prices.
Yet the physical, commercial and financial consequences of the war will take much longer to unwind. Ships remain stranded, infrastructure requires repairs, insurance remains uncertain and agricultural supply chains have already missed critical deadlines.
The Strait of Hormuz may reopen formally within days, but a complete return to normal global trade could take months.
