Brent crude oil futures (BZ) are down by over 13% on Wednesday as investors cheer on a two-week ceasefire between the U.S. and Iran. A close at current levels would mark the largest one-day percentage drop since 2020.
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Trade QQQ with leverageAs part of the agreement, Iran agreed to reopen the Strait of Hormuz for two weeks, contingent on ships coordinating with Iranian armed forces. However, traffic through the global energy chokepoint remains limited, with Iran threatening to keep Hormuz closed after Israel launched a missile attack on Beirut.
Hormuz Uncertainty Climbs ahead of Friday’s Peace Talks
Only three ships have crossed the passageway since the ceasefire was announced, according to Bloomberg. That’s a far cry from the pre-war daily average of 135.
“Time will tell whether it is a pause or a peace but, in the meantime, it is highly unlikely that trade into the Gulf will simply resume,” said Neil Roberts, Head of Marine and Aviation at Lloyd’s Market Association.
More than 800 ships are stuck in the Gulf waiting for the green light to leave. Iran’s threat to keep Hormuz closed has only heightened uncertainty for those ships ahead of U.S.-Iran peace talks on Friday.