Danske Bank: Ceasefire is not peace; there is no basis for long-term reconciliation among the US, Iran, and Israel.
2026-04-10 19:55:04
A Danske Bank report in April 2026 pointed out that although a short-term ceasefire was reached in the Middle East, the structural contradictions between Iran and the United States and Israel have not been resolved. Navigation in the Strait of Hormuz is blocked, the nuclear issue remains deadlocked, and regional military friction continues. Global energy supply, financial markets, and supply chain security are all facing continuous and profound shocks.
The essence of the ceasefire: a fragile respite, with no possibility of reconciliation regarding the core differences between the US and Iran.
The current US-Iran negotiations, brokered by Pakistan and held in Islamabad, are not a turning point towards peace, but rather a tactical pause by both sides to alleviate battlefield attrition. The negotiations have been fundamentally opposed from the outset and have failed to reach a binding consensus.
Iran insisted on a 10-point negotiation framework, with clear and firm core demands: the ceasefire agreement must cover the Lebanese war zone, retain civilian uranium enrichment rights, and maintain complete control of the Strait of Hormuz with a toll for passage. The United States, on the other hand, proposed a 15-point counter-proposal, firmly rejecting Iran's uranium enrichment activities and refusing to accept Iranian control of this vital global energy chokepoint; the two sides' terms had virtually no overlap. Although Pakistan, the mediator, confirmed that Lebanon was within the ceasefire area, Israel's military operations in Lebanon continued, with April 8th marking the peak of daily casualties in this round of conflict. Iran subsequently lodged a strong protest, rendering the ceasefire agreement virtually ineffective.
More alarmingly, Iran has successfully conducted a crucial strategic probe by closing the Strait of Hormuz—pushing the world's most powerful military force to the negotiating table. This suggests that Iran will use "control of the Strait" as a core bargaining chip in the future. Even if a long-term ceasefire is reached, as long as Iran retains de facto control of the Strait, the global energy market will be perpetually shrouded in geopolitical risk premiums. Any signal about "closing the Strait again" will trigger dramatic fluctuations in oil and gas prices.
From the perspective of a third-party organization, the International Crisis Group (ICG) pointed out that the current ceasefire lacks a monitoring mechanism and penalty clauses for breach of contract, and is therefore an "unsecured ceasefire." Neither the Iranian Revolutionary Guard nor the Israeli military has committed to ceasing cross-border strikes, and the window of opportunity for the conflict to reignite is extremely short.
Energy consultancy JBC Energy emphasizes that Iran's strategic goal has shifted from "defending against attacks" to "reshaping the regional order," and it will not easily give up its nuclear rights and control of the Straits. Therefore, reconciliation has no realistic basis in the medium to long term.
Energy Catastrophe: Long Recovery Period for Gulf Production Capacity, Persistent Supply Tightening Around Iran
The nearly six-week-long conflict in the Middle East has damaged more than 40 critical energy infrastructure sites in the Persian Gulf region, making it the largest energy supply disruption in human history, far exceeding the impact of the 20th-century oil crisis and previous Middle East conflicts. The report estimates that the total cost of repairing all facilities will exceed $25 billion, and the recovery period will far exceed previous market expectations.
Crude oil production cannot be restarted quickly: sudden shutdown of oil wells can lead to wax deposition and pressure imbalance in the wellbore, causing irreversible geological damage. Restarting requires specialized chemical treatment and replacement of customized equipment, with some core components taking months to deliver. Damage to refining facilities directly leads to a shortage of refined oil products. Even if crude oil production recovers, there will still be a continued shortage of end products such as gasoline and diesel. In the natural gas sector, the Ras Lafan LNG production line in Qatar will be shut down for at least a year, completely disrupting the global liquefied natural gas supply pattern. At the same time, damage to core production facilities in the Middle East aluminum industry is also putting pressure on the supply of industrial metals to contract.
Even with the ceasefire in effect, the Strait of Hormuz remains effectively closed, with only a few oil tankers obtaining passage permits, and the rolling traffic volume over the past seven days has fallen to a near ten-year low. As the transportation route for approximately 30% of the world's seaborne oil and 20% of its LNG, a blockade of the strait would directly sever the world's energy lifeline.
The International Energy Agency (IEA) adds that it will take at least 12-24 months for Gulf production capacity to recover. The withdrawal of Western engineers and technicians and the deterioration of the regional security environment will further prolong the recovery period, and the energy supply shortage will shift from a short-term shock to a medium-term trend.
For Iran, while the conflict has severely damaged the energy production of its neighboring Gulf countries, its own energy exports are also squeezed by Western sanctions and shipping restrictions. Even if oil prices rise, they cannot be fully converted into fiscal revenue, and economic and livelihood pressures continue to accumulate.
Sanctions countdown: Two key milestones in April, Iran's economy faces increasing pressure.
April is a crucial window for observing the situation in Iran, as two US sanctions waivers are about to expire, directly determining the trajectory of Iran's economy and energy exports. The sanctions waiver for Russia expires on April 11, while the one for Iran expires on April 19; these two decisions are highly interconnected.
The report argues that if the Strait of Hormuz remains closed and global energy prices remain high, the United States is likely to extend sanctions waivers for Russia and Iran to alleviate domestic inflation and the global energy crisis. However, core sanctions will not be relaxed—the ban on Iranian oil exports, the isolation of the financial system, and restrictions on investment in the energy sector will remain in place for the long term. Coupled with aging domestic energy infrastructure and soaring shipping insurance costs, Iran's energy exports are unlikely to return to normal levels, and the fiscal revenue gap will continue to widen.
From an economic perspective, the Iranian currency has depreciated significantly due to the conflict, inflation remains high, and pressure on people's livelihoods is gradually spreading to the broader society. Meanwhile, the strategic views of the US Republican Party indicate that even if the waivers are extended, the White House will simultaneously escalate "secondary sanctions," suppressing third-party companies cooperating with Iran in the energy sector and further blocking Iran's external economic channels.
Geopolitical panorama: Risk projections around Iran, and the extension of the global conflict chain.
Danske Bank maintains its high-risk assessment of the Middle East and provides a complete scenario forecast based on the global geopolitical landscape.
1. Core Scenario for Iran (Middle East)
Baseline Scenario (50%): US-Israeli military operations continue, conflict intensity fluctuates, shipping in the Strait of Hormuz is disrupted for a long period, and the US is bogged down in the Middle East and unable to extricate itself completely.
Downside risks (30%): The United States launches ground operations, the conflict escalates across the board, the Taiwan Strait is completely lost to navigation, and the global energy market collapses.
Upside risks (20%): US troop withdrawal, rapid decline in conflict intensity, gradual resumption of navigation in the Taiwan Strait, and a temporary decline in energy risk premium.
Market forecasts indicate that the probability of a US invasion of Iran remains stable at 30% before 2027, and the tail risk of military conflict persists.
2. Risk of diffusion
Spillover from the Russia-Ukraine conflict: Ukraine intensifies its attacks on Russian energy facilities, some drones stray into Finnish territory, and European energy security is threatened again. Meanwhile, Russia's fiscal revenue has improved significantly due to higher oil prices and sanctions exemptions, and the conflict is showing a trend toward becoming protracted.
The US is shifting its focus: The Trump administration previously declared that "Cuba is the next target." Cuba is facing a severe energy crisis due to the US oil embargo, and the US may increase its maximum pressure on Cuba after the situation in the Middle East eases.
Key conclusion: The ceasefire is only temporary; the Iranian issue will continue to dominate global markets in the long term.
This temporary ceasefire in the Middle East is not the end of the conflict, but the beginning of a new phase. With the three core conflicts—Iran's nuclear program, control of the Strait of Hormuz, and the status of the Lebanon conflict zone—unresolved, there is no basis for long-term reconciliation among the US, Iran, and Israel. Regional conflicts could easily break through the ceasefire framework and reignite at any time.
For global markets, the situation in Iran has escalated from a regional risk to a global systemic risk: prolonged energy supply shortages, normalized geopolitical risk premiums, increased financial market volatility, and forced restructuring of global supply chains. Investors need to continuously monitor three key signals: substantial progress in the Islamabad negotiations, the US decision on sanctions waivers in April, and the resumption of navigation in the Strait of Hormuz, dynamically adjusting asset allocations to seize structural opportunities amidst uncertainty.
The essence of the ceasefire: a fragile respite, with no possibility of reconciliation regarding the core differences between the US and Iran.
The current US-Iran negotiations, brokered by Pakistan and held in Islamabad, are not a turning point towards peace, but rather a tactical pause by both sides to alleviate battlefield attrition. The negotiations have been fundamentally opposed from the outset and have failed to reach a binding consensus.
Iran insisted on a 10-point negotiation framework, with clear and firm core demands: the ceasefire agreement must cover the Lebanese war zone, retain civilian uranium enrichment rights, and maintain complete control of the Strait of Hormuz with a toll for passage. The United States, on the other hand, proposed a 15-point counter-proposal, firmly rejecting Iran's uranium enrichment activities and refusing to accept Iranian control of this vital global energy chokepoint; the two sides' terms had virtually no overlap. Although Pakistan, the mediator, confirmed that Lebanon was within the ceasefire area, Israel's military operations in Lebanon continued, with April 8th marking the peak of daily casualties in this round of conflict. Iran subsequently lodged a strong protest, rendering the ceasefire agreement virtually ineffective.
More alarmingly, Iran has successfully conducted a crucial strategic probe by closing the Strait of Hormuz—pushing the world's most powerful military force to the negotiating table. This suggests that Iran will use "control of the Strait" as a core bargaining chip in the future. Even if a long-term ceasefire is reached, as long as Iran retains de facto control of the Strait, the global energy market will be perpetually shrouded in geopolitical risk premiums. Any signal about "closing the Strait again" will trigger dramatic fluctuations in oil and gas prices.
From the perspective of a third-party organization, the International Crisis Group (ICG) pointed out that the current ceasefire lacks a monitoring mechanism and penalty clauses for breach of contract, and is therefore an "unsecured ceasefire." Neither the Iranian Revolutionary Guard nor the Israeli military has committed to ceasing cross-border strikes, and the window of opportunity for the conflict to reignite is extremely short.
Energy consultancy JBC Energy emphasizes that Iran's strategic goal has shifted from "defending against attacks" to "reshaping the regional order," and it will not easily give up its nuclear rights and control of the Straits. Therefore, reconciliation has no realistic basis in the medium to long term.
Energy Catastrophe: Long Recovery Period for Gulf Production Capacity, Persistent Supply Tightening Around Iran
The nearly six-week-long conflict in the Middle East has damaged more than 40 critical energy infrastructure sites in the Persian Gulf region, making it the largest energy supply disruption in human history, far exceeding the impact of the 20th-century oil crisis and previous Middle East conflicts. The report estimates that the total cost of repairing all facilities will exceed $25 billion, and the recovery period will far exceed previous market expectations.
Crude oil production cannot be restarted quickly: sudden shutdown of oil wells can lead to wax deposition and pressure imbalance in the wellbore, causing irreversible geological damage. Restarting requires specialized chemical treatment and replacement of customized equipment, with some core components taking months to deliver. Damage to refining facilities directly leads to a shortage of refined oil products. Even if crude oil production recovers, there will still be a continued shortage of end products such as gasoline and diesel. In the natural gas sector, the Ras Lafan LNG production line in Qatar will be shut down for at least a year, completely disrupting the global liquefied natural gas supply pattern. At the same time, damage to core production facilities in the Middle East aluminum industry is also putting pressure on the supply of industrial metals to contract.
Even with the ceasefire in effect, the Strait of Hormuz remains effectively closed, with only a few oil tankers obtaining passage permits, and the rolling traffic volume over the past seven days has fallen to a near ten-year low. As the transportation route for approximately 30% of the world's seaborne oil and 20% of its LNG, a blockade of the strait would directly sever the world's energy lifeline.
The International Energy Agency (IEA) adds that it will take at least 12-24 months for Gulf production capacity to recover. The withdrawal of Western engineers and technicians and the deterioration of the regional security environment will further prolong the recovery period, and the energy supply shortage will shift from a short-term shock to a medium-term trend.
For Iran, while the conflict has severely damaged the energy production of its neighboring Gulf countries, its own energy exports are also squeezed by Western sanctions and shipping restrictions. Even if oil prices rise, they cannot be fully converted into fiscal revenue, and economic and livelihood pressures continue to accumulate.
Sanctions countdown: Two key milestones in April, Iran's economy faces increasing pressure.
April is a crucial window for observing the situation in Iran, as two US sanctions waivers are about to expire, directly determining the trajectory of Iran's economy and energy exports. The sanctions waiver for Russia expires on April 11, while the one for Iran expires on April 19; these two decisions are highly interconnected.
The report argues that if the Strait of Hormuz remains closed and global energy prices remain high, the United States is likely to extend sanctions waivers for Russia and Iran to alleviate domestic inflation and the global energy crisis. However, core sanctions will not be relaxed—the ban on Iranian oil exports, the isolation of the financial system, and restrictions on investment in the energy sector will remain in place for the long term. Coupled with aging domestic energy infrastructure and soaring shipping insurance costs, Iran's energy exports are unlikely to return to normal levels, and the fiscal revenue gap will continue to widen.
From an economic perspective, the Iranian currency has depreciated significantly due to the conflict, inflation remains high, and pressure on people's livelihoods is gradually spreading to the broader society. Meanwhile, the strategic views of the US Republican Party indicate that even if the waivers are extended, the White House will simultaneously escalate "secondary sanctions," suppressing third-party companies cooperating with Iran in the energy sector and further blocking Iran's external economic channels.
Geopolitical panorama: Risk projections around Iran, and the extension of the global conflict chain.
Danske Bank maintains its high-risk assessment of the Middle East and provides a complete scenario forecast based on the global geopolitical landscape.
1. Core Scenario for Iran (Middle East)
Baseline Scenario (50%): US-Israeli military operations continue, conflict intensity fluctuates, shipping in the Strait of Hormuz is disrupted for a long period, and the US is bogged down in the Middle East and unable to extricate itself completely.
Downside risks (30%): The United States launches ground operations, the conflict escalates across the board, the Taiwan Strait is completely lost to navigation, and the global energy market collapses.
Upside risks (20%): US troop withdrawal, rapid decline in conflict intensity, gradual resumption of navigation in the Taiwan Strait, and a temporary decline in energy risk premium.
Market forecasts indicate that the probability of a US invasion of Iran remains stable at 30% before 2027, and the tail risk of military conflict persists.
2. Risk of diffusion
Spillover from the Russia-Ukraine conflict: Ukraine intensifies its attacks on Russian energy facilities, some drones stray into Finnish territory, and European energy security is threatened again. Meanwhile, Russia's fiscal revenue has improved significantly due to higher oil prices and sanctions exemptions, and the conflict is showing a trend toward becoming protracted.
The US is shifting its focus: The Trump administration previously declared that "Cuba is the next target." Cuba is facing a severe energy crisis due to the US oil embargo, and the US may increase its maximum pressure on Cuba after the situation in the Middle East eases.
Key conclusion: The ceasefire is only temporary; the Iranian issue will continue to dominate global markets in the long term.
This temporary ceasefire in the Middle East is not the end of the conflict, but the beginning of a new phase. With the three core conflicts—Iran's nuclear program, control of the Strait of Hormuz, and the status of the Lebanon conflict zone—unresolved, there is no basis for long-term reconciliation among the US, Iran, and Israel. Regional conflicts could easily break through the ceasefire framework and reignite at any time.
For global markets, the situation in Iran has escalated from a regional risk to a global systemic risk: prolonged energy supply shortages, normalized geopolitical risk premiums, increased financial market volatility, and forced restructuring of global supply chains. Investors need to continuously monitor three key signals: substantial progress in the Islamabad negotiations, the US decision on sanctions waivers in April, and the resumption of navigation in the Strait of Hormuz, dynamically adjusting asset allocations to seize structural opportunities amidst uncertainty.
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