The Strait of Hormuz: A Deal with Iran and a New Tax on 20% of the World's Oil — Markets Are Pricing in Risks
Oil prices have corrected to their lowest levels in the last two months. This is a reaction to the agreement reached between the US and Iran to resume shipping through the Strait of Hormuz. However, beneath the external calm lies tense market preparation for the possible introduction of tariffs — the Iranian side plans to charge transit fees just 60 days after the route opens.
The agreement restores a transport corridor through which about a fifth of the world's total oil volume passes. Before the military conflict began, this route was completely free for all vessels. Now, Iran has announced its intention to levy service fees after the two-month free period ends. Donald Trump, for his part, stated that the strait will forever remain free of tariffs. Vice President JD Vance and Iranian authorities, conversely, are confident that the introduction of fees is inevitable.
Markets reacted immediately: the benchmark Brent crude fell by approximately 5% to $83 per barrel, and WTI to $80, marking a multi-month low. This decline reflects only a short-term easing of the supply situation. However, the futures curve indicates a more cautious sentiment among market participants.
Backwardation weakens, but bullish sentiment persists
During the conflict, the Brent market experienced sharp backwardation — a situation where the price of a near-term futures contract is higher than that of a more distant one. This clearly indicated an acute supply deficit. In April, the spread between the first and second Brent contracts reached $10.27. Now, this indicator has shrunk to approximately $0.67. Investors expect the deficit to ease. Nevertheless, the spread remains positive, indicating continued tension.
Brent quotes are gradually transitioning to moderate backwardation. They are not rushing to return to a state of contango, where distant contracts are more expensive than near-term ones. The acute shortage of crude has been resolved, but there are no signs of oversupply. Investor positioning is also changing. According to the latest Commitments of Traders report from the CFTC, speculators reduced short positions by approximately 9,300 contracts as of June 9. Options data confirms this trend: for the United States Brent Oil Fund (BNO), the put-to-call ratio stood at 0.08. Call contracts are open several times more than puts. Moreover, interest in calls is only growing. After the news about the fees, this ratio fell to 0.06.
Thus, quotes have already priced in the very fact of the route opening. The main bet now is on further developments. The scale of this bet directly depends on the size of the future fee. The BRN2 contract trades with a roughly one-month difference. The front-month contract remains slightly more expensive. The futures curve has noticeably flattened but shows no clear signs of a bearish trend. If the fee is indeed introduced, the spread could widen again, which fully aligns with the current predominance of bullish positions.
Potential impact of tariffs on barrel cost
Let's move on to the calculations. Before the conflict began, Brent was priced at around $70 with zero transit costs. About 7.6 billion barrels of oil are transported through the Strait of Hormuz annually. Possible scenarios for Iran's annual revenue from tariffs: at a fee of $0.50 per barrel — $3.8 billion; at a fee of $1 per barrel — $7.6 billion; at a fee of $2 per barrel — $15.2 billion. The $1 level is quite realistic. During the conflict, an unofficial fee of $1 per barrel was indeed charged. Additionally, there were reports of payments of up to $2 million per single voyage.
The direct cost of transit for the market is small. Initially, these expenses are mainly borne by producers. A much greater effect comes from the risk premium — an additional amount investors factor in due to supply uncertainty. This premium is currently particularly strong. The global market's margin of safety is minimal. For example, the US Strategic Petroleum Reserve is at its lowest level in 43 years.
Analysts believe that if the market returns to normal around $80, a gradual introduction of the fee will add $2–6 to the cost. A chaotic scenario, conversely, would push prices up by $10 or more. Thus, Brent could move into a range of $85 to $95. Under severe destabilization, quotes would again exceed $100. It is important to emphasize: the tariff itself of $1 or $2 is not capable of pushing Brent to $100. It is precisely disruptions and attempted blockades that lead to such an outcome. If the implementation of the agreement hinders vessel movement, a war premium will return to the market. Recall that during the conflict, it was fear that drove Brent above $100.
Forecasts and market bets — a unified picture
Industry leaders have warned about the risk of a rise. At Chevron and ExxonMobil, they stated that the price of Brent could soar to $150–160 if inventories continue to decline. According to the US Energy Information Administration (EIA), Brent will average around $105 in June and July, after which prices could decline. Goldman Sachs adjusted its forecast in light of the deal but warned of the risk of sharp fluctuations if passage through the Strait of Hormuz is not restored normally.
Even prediction markets confirm this outlook. On Polymarket, participants give about a 16% probability that the price of oil will hit a record high by December 31. This remains the primary scenario among bets, despite some cooling of the situation after the deal.
Currently, oil prices are holding near two-month lows. Brent crude is trading around $83, and WTI is near $80. The next CFTC report will clearly show whether buyers have managed to maintain their advantage. If restrictions are lifted without new tariffs, prices will continue to decline towards the EIA forecast range of $70–79. However, the introduction of controversial fees in 60 days will again tighten the balance. In this case, oil will return to levels above $80 and head towards the $90 area.
Expert opinion: The oil market is currently at a bifurcation point. The short-term price decline is a trap for bears. The real threat of a rise remains high, and the key driver will be not so much the size of the tariff, but the uncertainty surrounding its introduction and potential disruptions to shipping. Investors should prepare for increased volatility in the next two months.