Mixed messages on Strait of Hormuz create uncertainty for oil

Mixed messages from the U.S. and Iran on the Strait of Hormuz are injecting further uncertainty into the future of the waterway and global oil supplies.

Over the weekend, the Iranian military said that it would close the strait in response to Israeli strikes in Lebanon. At the same time, Washington said the waterway was open. 

U.S. Central Command said over the weekend that commercial ship travel through the waterway “increased” on Saturday and that safe passage “remained intact.”

But, even if the strait is open, it is still expected take some time for prewar shipping levels to be restored as the world waits to see what will ultimately happen to the key oil choke point. 

“Everything’s unpredictable,” said Patrick De Haan, head of petroleum analysis at GasBuddy, on Monday, when asked what he thinks ship traffic will look like during the agreed-upon 60-day ceasefire.

“We can hope that shippers are going to gain enough confidence, but I don’t know if tomorrow … Iran is going to change its mind, or if Trump is going to change his mind,” he added.

Generally speaking, De Haan said, he believes things will trend in a positive direction, since both the U.S. and Iran have incentive to make a deal.

“Americans and their affinity for cheap energy is kind of a driving power right now,” he said. “Imagine the pressure of seeing … $5 gas and $6 diesel, that would really be the undoing of the GOP under Trump.”

As for Iran, the country appears to get significant wins in the peace agreement, including a temporary lifting of U.S. sanctions on its oil.

Oil markets appeared stable Monday afternoon, with U.S.........

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