Markets price Middle East thaw
Investors grew cautiously optimistic after President Trump highlighted Israel‑Lebanon talks, which boosted so‑called ‘truce trades’ and pushed risk assets higher. (reuters.com) That sentiment is running ahead of reality for physical trade routes, because shipping disruptions in the Strait of Hormuz are still rattling energy flows and could keep freight, insurance and fuel costs elevated. (nationthailand.com) (reuters.com)
Markets swung back toward risk on April 16 after President Donald Trump said Israel and Lebanon had agreed to a 10-day ceasefire. (apnews.com) Trump announced the deal on Thursday, and the ceasefire took effect at midnight local time, according to The Associated Press. Netanyahu confirmed the truce, while reports said Israeli forces would remain in southern Lebanon during the pause. (apnews.com) (time.com) The market move fit the same pattern seen on April 8, when a separate U.S.-Iran ceasefire sent the dollar lower and pushed investors into stocks and other risk assets. Reuters reported then that the greenback hit a one-month low before rebounding as fighting resumed elsewhere in the region. (usnews.com) That optimism is colliding with the shipping map. Tanker transits through the Strait of Hormuz on April 15 were 90% below levels seen before the U.S. and Israel attacked Iran, according to shipping data cited by CNBC. (cnbc.com) The strait is not a side route. The U.S. Energy Information Administration said 20 million barrels a day moved through Hormuz in 2024, equal to more than one-quarter of global seaborne oil trade and about one-fifth of world petroleum consumption. (eia.gov) The International Energy Agency says about 25% of world seaborne oil and nearly one-fifth of global liquefied natural gas exports depend on the passage, with only 3.5 million to 5.5 million barrels a day of pipeline capacity available to bypass it. (iea.org) Trade data show the hit is broader than crude. The World Trade Organization said outbound traffic from the Persian Gulf in crude, liquefied natural gas and fertilizer-related cargoes “came to almost a complete halt” after Iran announced the strait’s closure on March 2. (wto.org) Insurers and shippers are still pricing the route like a war zone. Reuters, in a March 18 report republished by Claims Journal, said Washington rolled out a $20 billion reinsurance program as war-risk cover remained available but costly for vessels entering the region. (claimsjournal.com) That leaves investors betting on diplomacy in screens while cargo owners still face slower sailings, scarcer cover and higher fuel bills in the water. The relief trade can run ahead of the ships, but not replace them. (cnbc.com) (eia.gov)
