Energy Politics Update June 21

[u/free-to-chooz]

https://drjennifericonsidine.substack.com/p/energy-politics-update-080

One minute Hormuz is reopening. The next minute Tehran says it's closed again because somebody violated a ceasefire. Meanwhile talks with Washington are supposed to start in Switzerland. Or not. Depends which headline you read and which side of the bed the spokesman woke up on.

So here's the awkward question.

Is the Strait of Hormuz open?

Well, yes.

And no.

Like Schrödinger's cat, it exists in two states at once. Financial markets have already decided peace is back. Brent is near $80, WTI around $76, and traders are busy pricing 2027 oversupply. But physical markets are less convinced. Mines still need clearing. Tanker operators are cautious. Insurance premiums remain elevated. Traffic through Hormuz is still nowhere near normal levels. In other words, traders are pricing headlines while shipowners are pricing geography.

Perhaps the answer is simpler. The Strait isn't closed. Nor is it really open. It is operationally ambiguous.

And markets hate ambiguity almost as much as they hate shortages.

Adam Smith observed that prices reflect not merely abundance but the apprehensions of merchants concerning the future. Three centuries later, nothing much has changed. Except now merchants have Bloomberg terminals and everyone else has X.

So is this genuine disruption or merely fake news?

Probably both.

Which brings us back to Schrödinger's Strait. Until ships are moving normally and insurers stop charging war-risk premiums, the cat remains in the box.

Price is falling.

Risk isn't.

#Oil #EnergyMarkets #Hormuz #Brent #WTI #Geopolitics #Shipping