Diplomacy finally gained traction and the risk premium came out. Prices fell through the
first half of the week to their lowest in a month, before doubts crept back in and the
market steadied.
With strikes called off, Iran confirmed talks with Oman were underway and Washington
signalled a deal was close. By midweek Iran and Oman had agreed coordinates for new
shipping routes through the strait, Qatari officials said draft agreements were circulating,
and Trump projected the strait could reopen within days. The optimism did not hold:
within a day Trump was again attacking the regime’s credibility, Tehran insisted the Oman
deal did not itself mean reopening, and by the weekend Iran said the strait stays closed
until a set of sweeping conditions is met. Prices bounced off the midweek lows as the
market priced that hedging back in.
Fundamentals remain supportive underneath. European storage sits at its weakest
seasonal level in nearly two decades, LNG flows through Hormuz are still heavily
disrupted, and UK prompt power continues to swing on how much wind the system gets
each day, with gas plant setting the price whenever it drops. Cooler weather and the
diplomatic track are the bearish forces; everything physical still points the other way. The
market opens this week weighing a strait that remains closed against talks that are still
alive, and the next move likely belongs to whichever gives first.