On Friday, September 25th, Brent crude oil was trading around $99 per barrel. Pricing was not driven by the inventory calendar, but rather by the simultaneous occurrence of the Strait of Hormuz's navigation status and sideline contact at the UN General Assembly in New York. Statements from an advisor to Iran's Supreme Leader regarding the potential extension of the conflict into the Indian Ocean, coupled with rumors of a phased reopening of the strait and lifting of port blockades, alternately dominated price fluctuations. Deutsche Bank's strategy team noted that Brent crude briefly rose above $108 before retreating due to diplomatic rumors, but any breakthrough remains uncertain. Nearly seven months into the conflict, physical access has not returned to normal.

With news events driving pricing, diplomatic rumors can only alter the price slope.

The market completed a full risk repricing within 24 hours. First, Iranian state media, citing a statement from an advisor to the Supreme Leader, indicated that the conflict could escalate further and extend to the Indian Ocean or other sea areas, leading to the re-incorporation of maritime premiums into near-month contracts. Then, rumors emerged of a phased arrangement for US-Iran talks: Iran would allow the Strait of Hormuz to resume navigation, with the US correspondingly lifting its economic blockade of Iranian ports. Iranian President Peshichiyan stated at the UN General Assembly that a situation where all parties benefit from the Strait while Iran's shipping is cut off is unacceptable, emphasizing that the Iranian people will not succumb to pressure and that diplomacy remains an option. Iranian Foreign Minister Araqchi stated that a reopening plan with a window of approximately seven days had been submitted, with conditions including easing military pressure and lifting the blockade. Deutsche Bank's strategy team's observations aligned with the market: geopolitical rhetoric pushed prices up, while rumors of talks pushed them down; neither changed the fact that the channel itself remained constrained. Given the precedent of a near-arrangement breaking down again around July, the market treated the rumors as a volatility event rather than confirmation of restored flow.

Strait traffic remains a hard constraint, and the price difference reflects the premium for water transport.

Before the conflict, the Strait of Hormuz handled approximately 20% of the world's daily crude oil and liquefied natural gas supply, with an average of about 125 large merchant ships passing through daily. The latest ship tracking data shows that on September 24th, commodity-related passage dropped to 9 ships, down from 14 the previous day, and the 10-day average is about 18; of the 8 ships departing, only one was a fully loaded Very Large Crude Carrier (VLCC). Some ships turned off their transponders, and publicly available counts may underestimate unauthorized vessels, but observable traffic remains far below pre-conflict levels. Bypass pipelines cannot adequately replace the approximately 20 million barrels of oil that pass through the Strait daily. Therefore, the premium of Brent crude relative to inland pricing has widened again, with the near-month Brent-West Texas Intermediate (WTI) crude price spread at around $13, and the premium paid by overseas buyers for spot seaborne cargoes is also widening. Harris Kurshid, Chief Investment Officer of Carob Capital, stated that without substantial changes, Brent is more likely to continue pricing in a highly volatile range; a credible phased arrangement would quickly compress the premium, while further disruptions to the logistics chain would raise it again. This is about traffic flow, not slogans. Deutsche Bank had previously warned that even if the political arrangements are implemented, it will take time for mine clearance and navigation safety to be restored, and the throughput in the strait may not return to its pre-conflict peak.

Oil and gas pulses propagate to bond curves

Recently, the yield on 10-year US Treasury bonds rose to approximately 5.20%, near its highest level since 2007; the 30-year yield rose to approximately 5.48%, near its highest level since 2004. The yield on 10-year German government bonds rose to approximately 3.61%. The transmission chain is clear: Strait congestion increases energy prices, energy prices are factored into inflation expectations, inflation expectations change the pricing of the Federal Reserve's policy path, and long-term yields are subsequently reassessed. Natural gas futures fell by approximately 3.6% to $3.18 per million British thermal units (MMBtu) on September 25th, indicating that the same set of diplomatic rumors simultaneously affected both crude oil and natural gas, with cross-commodity correlations significantly increasing on the news day. The term structure needs to be examined separately. Near-month contracts are more sensitive to disruptions in transit, while far-month contracts see more flow recovery after the end of trading conflicts. The near-month contract leaving an upper shadow around $108 and then retracing the next day indicates that the premium can be compressed by geopolitical news, but the extent of the compression depends on whether ship counts recover simultaneously. While the count is still in the single digits, the yield fluctuates in the same direction as oil prices, which is a manifestation of the energy shock entering the macro discount rate, rather than an isolated trend of a single asset.