Hormuz Deal in Sight, but Actual Relief Still Weeks Away

Treasury Secretary Scott Bessent said on Tuesday morning that a deal to reopen the Strait of Hormuz could be reached within hours, causing crude oil prices to drop by nearly 4% and Dow futures to surge over 640 points.

Bessent stated that the US and Iran were in talks and could reach an agreement as soon as Tuesday or Wednesday to restore commercial shipping through the narrow passage, which carried roughly one-fifth of global oil and 20% of the world's liquefied natural gas before the conflict began on February 28.

However, the physical and financial machinery that must operate between a signed agreement and an actual reduction in what Americans pay at the pump or the grocery store is not measured in hours, but rather weeks. The market moved on the assumption that a deal brings relief, but understanding what actually has to happen first is crucial.