Hormuz Crisis Priced into Oil Markets as Disruptions Continue

The oil market is adapting to a prolonged crisis in the Strait of Hormuz, where US and Iranian tensions have resulted in disruptions to Middle East energy supplies.

Nearly six months after the conflict began, hopes for a diplomatic breakthrough have faded, with neither side willing to compromise over the future of the critical waterway.

The market is pricing in a prolonged crisis, with crude oil prices stabilizing around $90 a barrel. Crude has surrendered some of its panic premium since the early days of the conflict but remains roughly 50 percent higher than at the start of the year.