Oil prices were back on the rise Thursday after the US and Iran traded a fresh round of airstrikes. Despite signals earlier in the week that negotiators were making progress toward a ceasefire, tensions are now escalating again, with Washington and Tehran deeply divided over potential future rules of transit through the Strait of Hormuz.
US President Donald Trump insisted this week that political pressure to lower gasoline prices would not force his hand into an unfavorable deal. But conditions in the global oil market are set to worsen in the next few weeks, Morgan Stanley analysts warned, as the rate of releases from global strategic reserves plummets to less than a third of current levels.
In the meantime, insurance rates for tankers passing the strait — the most important indicator of whether the waterway is “reopening” — haven’t budged, Dylan Mortimer of the brokerage firm Marsh told Semafor on Thursday. “Meaningful change in insurance conditions would likely require a sustained de-escalation in regional tensions and clearer security assurances for merchant shipping,” he said.