ETO Markets Buzz | Hormuz Reopening Eases Oil Risk, but Supply Normalisation May Take Months

Global Market Overview | June 2026

According to ETO Markets analysis, global markets are being shaped by a more hawkish central bank backdrop, mixed Chinese activity data, and easing geopolitical risk across energy markets. The Federal Reserve kept rates unchanged at 3.75%, but its projections remained cautious. Rates are expected to ease only to 3.6% over one year and 3.4% over two years, while nine of 19 officials still see scope for another increase this year.

The hawkish tone pushed the US dollar to a one-year high near 100.80 and contributed to gold‘s third consecutive weekly decline, with prices closing around USD 4,150. China’s data remained soft, while the Bank of Japan raised rates by 25 basis points to the highest level since 1995. Brent crude stabilised near USD 80 after Israel and Hezbollah reached a ceasefire agreement.

US-Iran Framework Reduces Immediate Risk

This weeks ETO Markets Buzz focuses on the preliminary memorandum of understanding between the United States and Iran. The agreement appears to establish a 60-day ceasefire and de-escalation framework rather than a final peace settlement.

Its immediate objectives are to halt military escalation, reopen critical energy shipping routes, and create time for negotiations on nuclear commitments, sanctions relief, maritime security, and regional stability. Talks in Switzerland reportedly produced a roadmap toward a broader agreement within 60 days.

Hormuz Reopening Supports Supply Recovery

The most important market development is the expected reopening of the Strait of Hormuz to commercial shipping, alongside the removal of the US blockade on Iranian ports. A successful reopening would improve oil and liquefied natural gas flows from the Gulf and reduce part of the geopolitical risk premium embedded in crude prices.

The framework aims to restore shipping toward pre-conflict levels within roughly 30 days. However, that timeline remains dependent on safety inspections, mine clearance, naval protection, insurance availability, and renewed confidence from tanker operators.

Oil Flows May Take Months to Normalise

The Strait being technically open does not guarantee an immediate return to normal trade. Shipowners, insurers, and commodity buyers must also consider whether the route is commercially safe and financially viable.

In an optimistic scenario, tanker traffic could recover within two to four weeks. A more realistic base case is up to three months as vessel backlogs clear, war-risk insurance premiums decline, and security conditions are verified. This transition may keep a geopolitical premium in oil prices even as physical supply gradually improves.

Final Agreement Still Faces Obstacles

The MOU creates time for broader negotiations, but several difficult issues remain unresolved. These include enriched uranium stockpiles, inspection and verification arrangements, phased sanctions relief, access to frozen Iranian assets, oil export waivers, and enforcement mechanisms.

Regional compliance also remains important, particularly around Lebanon and Hezbollah. Any breach of the ceasefire or renewed military escalation could quickly reverse the decline in oils risk premium.

China and Central Banks Remain in Focus

Chinas house prices fell another 3.5% year on year, while retail sales declined 0.6% against expectations for growth. Industrial production increased 4.5%, remaining positive but below forecast.

Australias central bank left rates unchanged as weaker economic growth helped offset persistent inflation. Upcoming US PCE inflation, personal spending, durable goods orders, global PMI surveys, and European confidence indicators will provide further direction for growth, inflation, and interest-rate expectations.

Outlook

Looking ahead, ETO Markets expects crude prices to remain sensitive to the implementation of the US-Iran framework, shipping activity through Hormuz, insurance costs, sanctions sequencing, OPEC+ policy, and global demand.

The agreement is initially bearish for oil because it reduces immediate supply risk. However, incomplete normalisation, depleted strategic reserves, and unresolved political conditions should limit the scope for a sustained price collapse. In this environment, ETO Markets continues to emphasise close monitoring of actual tanker flows rather than relying solely on diplomatic headlines.

Disclaimer

The information contained herein is for general reference only and does not constitute investment advice, a solicitation, or an offer to buy or sell any financial products.

ETO Markets does not guarantee the accuracy, completeness, or timeliness of the information and shall not be liable for any losses incurred from reliance on such content.