"The end of the war, therefore, is unlikely to usher in a stable peace. That reality means the Strait of Hormuz will become a source of geopolitical risk for a long time—a live wire down the middle of the global economy."
"From now on traders will act based on the knowledge that Iran might at any time attack, and that new perception will create new risk premia in critically important sectors."
President Trump eased tensions with Iran, leading to a market rebound. However, geopolitical risks in the Strait of Hormuz are expected to remain high. The Iranian regime, influenced by hardliners, is likely to continue its hostility towards the U.S. Even if negotiations reduce certain military capabilities, Iran will still possess threats that can impact global oil supply. This ongoing risk will influence trader behavior and keep oil prices elevated, with Brent crude expected to remain above $80 per barrel for several months.
Read at Fortune
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