Ceasefire — but trade at risk
- President Trump extended a ceasefire in the Iran-Israel conflict but kept a US blockade that restricts maritime traffic. - The Strait of Hormuz closure and blockade have already pushed oil prices higher and disrupted global shipping routes. - Tehran says it has 'new cards', including urging the Houthis to threaten the Bab el‑Mandeb Strait, raising further trade and insurance risks. (thehindu.com) (the-independent.com)
President Donald Trump extended the Iran ceasefire on April 22, but he kept a U.S. blockade on Iranian ports and shipping lanes in place. (apnews.com) Trump said he was granting more time after a request from Pakistan, which has been mediating, and said the truce would last until Tehran submits a “unified proposal.” Iran refused to send negotiators to Pakistan while the blockade remains. (apnews.com) (politico.com) The blockade centers on the Strait of Hormuz, the narrow waterway between Iran and Oman that carries about 20.9 million barrels a day of oil, roughly one-fifth of global petroleum liquids consumption and one-quarter of seaborne oil trade. (eia.gov) That makes Hormuz less a local shipping lane than a valve on the global energy system. The U.S. Energy Information Administration said oil flows through the strait remain limited, with storage filling in countries that rely on the route for exports. (eia.gov 1) (eia.gov 2) Shipping companies were already rerouting and repricing risk before Trump’s latest extension. Lloyd’s List reported this month that marine insurers had repriced Gulf war-risk cover and that more than 600 vessels were still stuck in the Middle East Gulf during an earlier ceasefire window. (lloydslist.com) Tehran has signaled it could widen the pressure by leaning on the Houthis in Yemen to menace the Bab el-Mandeb Strait, the southern gateway to the Red Sea. That chokepoint carried about 4.2 million barrels a day of oil in the first half of 2025, after traffic had already fallen because of security fears and higher insurance costs. (the-independent.com) (eia.gov) Bab el-Mandeb matters because ships moving between Asia and Europe through the Suez Canal must pass through it. Earlier Red Sea attacks pushed carriers onto the longer route around the Cape of Good Hope, adding time and cost to voyages and lifting freight rates. (eia.gov) (freightwaves.com) Iran says the blockade itself violates the ceasefire and amounts to an act of war. Trump, by contrast, has argued the U.S. now “totally” controls access to Iranian ports and is using that leverage to force talks. (aljazeera.com) (independent.co.uk) So the ceasefire now covers airstrikes more than commerce. As long as Hormuz stays constrained and Bab el-Mandeb is under threat, oil, shipping, and insurance markets will keep trading this as an active crisis. (apnews.com) (eia.gov) (lloydslist.com)
