What happens to oil if the Strait of Hormuz reopens?

Two things complicate the reflex answer. The first is that the reopening being priced is not a return to the previous world — the band on Iran charging for transit by year-end sat at 0.520 on 13 August, so the residual settlement being contemplated is a permanent cost on every cargo.

The second is that a second seaborne supply story is running in parallel. Ukrainian strikes have degraded Russian refining and export capacity, with fuel shortages reported across sixteen Russian regions. A reopening would be absorbed against that loss rather than into a clean recovery.

The odds themselves remain low on the horizons the layer prices: a US-Iran agreement by the 15 August deadline at 0.035, a US-announced end of the blockade at 0.028, and sanctions relief before 31 August at 0.175, down from 0.510 on 8 August.