Cargo ships in the Gulf near the Strait of Hormuz, seen from north of Ras al-Khaimah, near the border with Oman’s Musandam government, amid the US-Israeli conflict with Iran, in the United Arab Emirates, March 11, 2026.
Stringer | Reuters
Fifty days into the U.S.-Israel war against Iran, tensions have escalated again after clashes in the Gulf prolonged shipping disruptions and sowed doubt over a fragile ceasefire set to expire this week.
Iran declared the Strait of Hormuz fully open to commercial traffic on Friday, sending crude oil prices fall by more than 10%. On Saturday, hopes of a fully open artery quickly dissipated when Tehran reimposed the closure of the choke point, after President Donald Trump refused to end the US naval blockade of Iranian ports.
After a brief recovery during transit attempts on Saturday, maritime traffic in the Gulf blocked once again, with ships under fire from critics halfway through and forced to withdraw.
The US Navy fired on and seized an Iranian container ship in the Gulf of Oman on Sunday. Trump called Iran’s actions over the weekend a “complete violation” of the truce and renewed his threats to strike Iranian power plants and bridges if Tehran refused a deal.
For markets, this is a reminder of the fragility of the two-week ceasefire, and a deal that could bring a lasting end to the war is still far from being reached.
US stock futures fell while crude oil prices jumped as the United States and Iran were on the brink of new conflict. West Texas Intermediate Futures jumped more than 6% to $89 a barrel shortly after midnight Monday while the international benchmark Brent rose 5.6% to $95.50 a barrel.
“We had the most violent day in the Strait since this crisis began on Saturday, and things don’t seem to be getting any better,” said Rory Johnston, founder of Commodity Context.
“As we continue to experience these sales and it looks like we’re on the verge of finally getting it, football — Lucy takes it away — and we’re back where we started,” Johnston told CNBC. “Squawk Box Asia” Monday.
“The strait is still not flowing, and 13 million barrels of production per day remain stuck. We’re losing more every day,” said Johnston, who is also a lecturer at the University of Toronto’s Munk School of Global Affairs and Public Policy.
The best realistic resultMuch will depend on whether the United States and Iran meet for a second round of peace talks in Pakistan later this week, while the ceasefire is in effect. expected to expire on Tuesday.
Trump said US and Iranian negotiators would resume negotiations in Islamabad on Monday. Iran, however, denied that he would participate during the meeting, citing what he called Washington’s “excessive demands, unrealistic expectations, constant changes of position” and ongoing blockade as a violation of the ceasefire.
The first round of negotiations April 12 between Vice President JD Vance and Iranian Foreign Minister Abbas Araghchi did not result in an agreement. Washington would have proposed a 20-year pause on Iranian uranium enrichment, a request that Iranian leaders rejected, insisting on 5 years.
Until the U.S. negotiating team rids itself of the misconception that military victory equals strategic dominance, we will not achieve a solution.
Alan Eyre
Distinguished diplomatic researcher at the Middle East Institute
The underlying differences between Washington and Tehran run deeper than the current impasse, said Alan Eyre, a senior diplomat at the Middle East Institute and a former member of the U.S. team that negotiated the 2015 Iran nuclear deal.
“The American side has not really focused on the negotiations per se. What they are waiting for is the Iranian surrender,” Eyre said. “Until the U.S. negotiating team gets rid of the misconception that military victory equates to strategic dominance, we will not achieve a solution.”
Eyre warns that the latest flashpoints risk escalating the conflict even higher in the short term. “There is a growing predisposition here where both sides could escalate and return to a shooting war, which no one wants.”
While a productive round of negotiations in Islamabad remains a possibility, it is “unfortunately more likely to be a resumption of hostilities”, Mr Eyre added.
A high-stakes bet The economic costs of the conflict are mounting as the Strait of Hormuz – which normally carries around a fifth of the world’s oil supply – has been effectively closed for almost two months.
“The crisis is a waste of time and production,” Johnston said, estimating supply disruptions at about 13 million barrels of crude, condensate and natural gas liquids per day.
“This cumulative effect has already exceeded half a billion barrels,” he said, warning that even an imminent announcement of a deal would not immediately repair the damage.
Even if a deal were reached, experts warn it could take months to recoup the supply lost over the past few weeks of shutdowns, keeping oil prices high for longer.
“If we actually opened the strait, we would probably see an immediate rout of another $10 to $20 a barrel due to hot money. But ultimately we would get rid of on day one and then recover higher – probably in the $80s and $90s – to reflect the situation. [oil] lasting shortage. »
Crude prices have surged more than 30% since the start of the war, with Brent briefly surpassing $110 a barrel for the first time in about four years, according to LSEG data, before easing on hopes of a breakthrough.
More than 500 million barrels of crude and condensate have been removed from the global market – the largest energy supply disruption in modern history, according to Kpler data.
Despite the severity of the energy disruption, the United States equity markets remained largely resilientwhile investors have shrugged off the conflict as an incident that will be resolved relatively quickly.
Vishnu Varathan, head of macro research at Mizuho Bank, cautioned, however, that this optimism could be premature. “We cannot indulge in premature euphoria about a signed agreement, because the lingering negative effects mean we will not quickly get out of this.”
The International Monetary Fund warned Tuesday that global growth will inevitably suffer even if the ceasefire holds, citing uncertainty around the Strait of Hormuz as a persistent drag, driving up energy costs and inflation.
“It is clear that we will not return to the Goldilocks scenario,” said Brian Arcese, portfolio manager at Foord Asset Management, referring to a scenario of stable growth and low inflation. The longer the strait remains closed, the greater the risk to the global economy, he said, although the actual extent of the damage may vary “on a daily and weekly basis.”
