Live Markets-Is Hormuz de facto open?

All eyes are on the Strait of Hormuz, which is widely seen as being controlled by Iran's Islamic Revolutionary Guard Corps (IRGC), effectively closing it to commercial shipping, amid concerns about oil prices, global inflation, and economic growth.

However, appearances can be deceptive.

According to Felix Vezina-Poirier, macro strategist at BCA Research, Iran may be approaching peak leverage over Hormuz as more oil appears to be getting through, and its ability to disrupt traffic weakens.

“Reports over the weekend suggested that 75-80% of normal oil traffic may now be moving through the Strait, according to U.S. Energy Secretary Chris Wright,” Vezina-Poirier says.

“Shipping-company reporting has not confirmed that figure, but rising global inventories and other data are consistent with more oil getting through than official tracking suggests,” he adds.

“The US, regional governments, and shipping companies are also increasingly finding ways around Iranian restrictions, including convoys and vessels switching off transponders, echoing behaviour during the 1980s Tanker War.”

As long as the Hormuz impasse remains unresolved, uncertainty will hang over energy markets.