LONDON: Iran and the U.S. have both announced rival blockades of the Strait of Hormuz once again, crippling an already fragile ceasefire deal. This should alarm oil traders who had been pricing in a rapid return to normal. But markets appear sanguine - and that may be a miscalculation. The global oil and gas market proved remarkably resilient during the 108-day conflict, thanks in large part to the ample global reserves present before the war began on February 28. But the energy market is no longer protected by ample emergency stocks, so the margin for error has become a lot smaller. President Donald Trump said on Monday that the U.S. was reinstating its blockade of Iranian shipping in the Strait of Hormuz following Iran's declaration over the weekend that it was closing the waterway amid fresh missile and drone attacks between the two sides.
This leaves the June 17 interim ceasefire on shaky ground. Trump also said Washington would become the "guardian of the Hormuz Strait", ensuring the shipping chokepoint - through which a fifth of global oil and liquefied natural gas supplies previously transited - remained open to all other vessels.
