Energy consultant Ali Al-Riyami said the announcement had been interpreted positively by markets, but cautioned that stability would depend on whether the arrangement is formalised and sustained through ongoing negotiations.
“It is a very positive move. The oil market and the energy market have received this news very positively, and immediately we have started seeing prices going down,” Al-Riyami said.
He added that the move had allowed both sides to claim political gain while creating space for diplomacy. “Everybody from both parties, the Americans and also the Iranians, are declaring a win situation… this gives a chance for diplomacy,” he said.
According to him, the initial price drop mainly reflects the removal of the geopolitical risk premium attached to the Strait. However, he warned that further downside could emerge if physical shipping flows normalise in the coming days.
“Once we start seeing the flow of ships going in and out of the Strait, that could bring another 2–3% downside in prices,” Al-Riyami said.
The developments come amid heightened political signalling from Washington. In a social media post, US President Donald Trump said, “Iran has announced the Strait fully open and ready for passage. Thank you,” while also indicating that a naval blockade of Iranian ports would remain in place until broader US-Iran transactions are fully completed.
Despite the easing of immediate tensions, Al-Riyami stressed that the situation remains fragile and dependent on a formal agreement, with ceasefire arrangements still linked to wider regional dynamics.
“It is still early days. We need to finalise the deal, either in Islamabad or Geneva or elsewhere. We need to see a document signed by both parties,” he said, adding that energy markets remain sensitive to any reversal in the ceasefire.
He noted that oil prices are currently being driven by both geopolitical risk and supply-side decisions by producing countries adjusting output levels, suggesting that a full recovery to previous price ranges is unlikely in the near term.
Separately, container shipping executives also flagged caution over a return to normal maritime operations despite the easing of tensions in the Strait.
Sunil Vaswani, Executive Director of the Container Shipping Lines Association, said shipping and insurance markets would likely wait for clearer confirmation before resuming normal service patterns.
“It is indeed a very welcome announcement… but I think still, from the shipping point of view and from the insurance point of view, companies might want to wait until an actual deal is struck,” he said.
Vaswani added that the situation would remain a “wait-and-watch” scenario until vessels currently stranded in the region begin moving safely through the waterway, particularly tankers and LPG carriers, which are critical for global energy flows.
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“There have been too many ups and downs, and service patterns have changed very frequently. So while everybody would want to return to normalcy as soon as possible, there will definitely be a degree of caution,” he said.
The easing of tensions has already triggered volatility across global markets, with crude oil retreating sharply while equities gained on expectations of reduced supply disruption risk. Further clarity is expected as diplomatic negotiations progress in the coming days.
