On Thursday (June 11), during the US trading session, the Strait of Hormuz remained a key variable. Following news that Trump had announced progress in discussions regarding an agreement with Iran, international crude oil prices briefly fell to around $86.50. Market expectations for a potential ceasefire and the reopening of the Strait quickly cooled, increasing supply risk premiums and pushing oil prices lower.



However, the reality is more complex. Despite sporadic traffic, the Strait of Hormuz remains highly tense. British maritime analysis firm Windward, citing satellite imagery, reported that a small number of vessels still transited the strait's deepwater channel that day, some of which had their AIS systems disabled. Iran had announced a temporary closure of the strait, threatening violators with strikes, while US Central Command insisted the strait remained open to navigation. Overall, the number of vessels passing through was far below pre-war levels (dozens per day), limiting further declines in oil prices, which subsequently recovered some of their losses.

The actual impact of supply disruptions continues, with the market oscillating between negotiating optimism and geopolitical realities.

Why did the conflict erupt again at this critical juncture? Was it a negotiation tactic or a protracted tug-of-war?

Just two or three days before Trump declared an agreement was imminent, military clashes broke out again, and the latest news indicates the conflict has not completely subsided. This may be a typical example of both sides' strategy of "using fighting to promote negotiations." News of war is no longer as likely to significantly stimulate the oil market as it did initially—investors have gradually become accustomed to this normalized pattern of "fighting while negotiating." There is reason to believe that the market holds strong hopes for a final agreement. I believe the possibility of both sides reaching some form of principled agreement is high. The current limited conflict is likely a negotiating tactic to test the other side's bottom line on key concessions: such as the asset freeze release mechanism, the reopening of the Strait of Hormuz during the 60-day ceasefire, and the negotiation framework for Iran's nuclear program.

If either side sees the other soften its stance or something amiss, they may quickly change their attitude and show goodwill. Mediation by Qatar and other mediators has narrowed the three major differences, and Iranian officials have informed several countries of the text of a principled agreement; however, final approval by the Supreme Leader remains crucial.

Optimistically, the two sides might be able to reach a ceasefire agreement in the short term. But will the Strait of Hormuz remain peaceful from then on? The answer is probably not so optimistic. Historical experience shows that, as a global energy lifeline, the implementation of any agreement in this strait faces the test of multi-party competition and unexpected risks.

If the agreement is indeed signed, the market will quickly "wake up".

Assuming the agreement is formally signed, the market will undoubtedly see a celebratory rebound in the short term—oil prices may fall further, and risk assets will be boosted. However, it's not that simple. The market will soon recover from its euphoria: the "peace" between Iran and the United States is far from the end of this regional conflict. The current confrontation between the US and Iran risks sliding into a low-intensity, normalized situation. The US's logic of "using force to promote dialogue" requires continued pressure, while Iran's reciprocal retaliation could create a spiral of reprisals. Neither side wants to descend into ground war or suffer complete economic collapse, so they maintain contact through indirect channels, but every friction carries the risk of miscalculation and escalation.

More importantly, the agreement is likely only a temporary framework (e.g., a 60-day ceasefire), and core disagreements such as the nuclear issue, sanctions lifting, and regional influence still require long-term negotiations. The maritime blockade may continue until the agreement is implemented, and the reactions of other actors in the region will also affect its effectiveness. Investors need to be wary: geopolitical premiums won't disappear overnight, and oil prices may experience a typical "buy the rumor, sell the fact" correction after the agreement.

Israel is a major variable; Netanyahu will strengthen his strongman image.

Israel is an undeniable variable in the entire US-Iran power struggle. Netanyahu is facing pressure from the parliamentary elections in October (or possibly as early as September). To maintain his strongman image and political support, he is likely to take a tougher stance in the agreement process, demonstrating "zero tolerance" for the Iranian threat.

As a wartime leader, Netanyahu needs to demonstrate his leadership to domestic voters, especially on issues involving Iran's nuclear capabilities and regional security. This could lead to potential "interference" or additional demands from Israel on any US-Iran agreement, becoming a destabilizing factor in negotiations. Pre-election political considerations often make the diplomatic process more complex and volatile.

Overall Outlook

The US-Iran situation is currently in a tug-of-war phase of "fighting and talking," with a short-term agreement possible, but long-term stability still faces multiple challenges. The oil market will continue to fluctuate amid geopolitical risks, the actual speed of supply recovery, and regional political variables (such as the Israeli election). For investors, remaining cautious and paying close attention to actual navigation data in the Strait of Hormuz and official statements from all parties is the best strategy. The developments in the coming weeks will determine whether oil prices return to lower levels or remain in a high-level consolidation phase.