The market voted on the quiet before any government announced anything.
On the Sunday evening open, Brent crude fell $4.89 - 5.05 percent - to $91.89 a barrel. West Texas Intermediate fell $4.67, or 5.23 percent, to $84.64 [1]. Both sat at their lowest in nearly a week, against a peak of $100 a barrel earlier in the month [1].
What moved was not supply. No tanker was unloaded, no pipeline reopened, no strait declared safe. What changed was two consecutive nights in which the United States did not bomb Iran, and Iran did not fire back.
'Hopes are rising that a genuine diplomatic path may be opening,' said Tony Sycamore of IG Markets, pointing to a possible return to the 14-point memorandum of understanding with more clarity around control of the Strait of Hormuz [1]. That is a striking amount of confidence to place in an arrangement neither government has signed.
The counterweight came from Saul Kavonic of MST Marquee, who cautioned that 'any rebound in flows through the Strait of Hormuz is likely to prove slow and partial, as many shippers remain wary' [1]. Ships do not un-fear a strait as fast as a futures contract reprices it, and crews who have been running dark will want more than two quiet nights.
None of this has reached anyone filling a tank. The national average for gasoline is $4.110 a gallon against $3.151 a year ago, and diesel $5.295 against $3.738 [2]. Crude falls in hours; the pump follows in weeks, if it follows at all.
