Lale Arkoner, global analyst at E-toro.- The war may be on pause, but we expect several effects to persist on four fronts: energy prices, shipping/logistics, inventories and market risk premiums. Even after a ceasefire, the situation in Hormuz will not normalise overnight.
Market prices adjust much faster than physical flows, and shipping companies may need time to regain confidence, as port activity takes approximately two months to normalise. Restocking inventories takes even longer: energy analysts estimate that it will take around four months for OECD reserves to reach a more stable level.
Therefore, the current market euphoria is understandable, but it is more likely to be a relief rally than a lasting recovery. Risk assets could remain stable in the short term if tanker traffic improves and the rhetoric softens, but upside potential is limited without a broader agreement.
As for fuel prices, the response is not immediate. If the ceasefire holds, wholesale crude could fall quickly, but pump prices and overall fuel costs tend to lag behind, as physical supply chains, insurance costs, shipping routes and inventory replenishment take time.
The physical market has not yet returned to pre-war levels, and the normalisation of actual supply conditions will take months, not days.
On the supply side, companies should diversify routes, secure alternative sources, replenish inventories and maintain flexibility in shipping and insurance, as disruptions and high costs could persist. On the demand side, buyers should stagger their purchases, focus on essential use and remain cautious, since with low inventory levels, even small disruptions can quickly send prices soaring.
Overall, we believe the pause can ease the panic, but not eliminate the structural risk premium. Markets may remain calmer, but sensitivity to energy, shipping and news is likely to remain elevated for months.
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