Disarming a bomb – if that's true

Cervenka: The words the world has been waiting for

Andreas Cervenka

Reporter and economic commentator

This is a commentary text.  Analysis and positions are those of the writer.

Published 18.17

"The Strait of Hormuz is open to all traffic."

That's the sentence that disarms a bomb.

Now the world looks like it can avoid a historic oil crisis.

If that's true.

And it's not certain.

Question marks immediately arose.

"In accordance with the ceasefire in Lebanon, the passage of all commercial ships through the Strait of Hormuz is declared completely open for the remaining period of the ceasefire," wrote Iranian Foreign Minister Abbas Araghchi on X on Friday afternoon,

It caused the price of oil to plummet and the world's stock markets to rise.

It's a completely reasonable reaction. It's the stoppage in the Strait of Hormuz that has turned a regional conflict into a global crisis. With each day that passes without oil tankers passing, the threat of a severe energy crisis with fuel shortages and chaos has increased. It has been like a ticking bomb set on the entire world economy.

Now the countdown seems to have finally been interrupted. Millions of people, not least in the poor parts of the world, can breathe a sigh of relief. In Asia, the Iran war has already become really noticeable.

Are all the problems gone?

No.

Just like many times before in this conflict, there are more questions than answers.

 

Photo: /AP/TT

Are there other question marks

US President Donald Trump was quick to announce that the US blockade of Hormuz, which aims to strangle Iran's oil exports, will also be in full force until a peace agreement with Iran is fully completed.

This was quickly met with backlash when the regime-loyal Fars news agency wrote that if the blockade continues, the strait will be closed again. There is already some confusion there.

But there are also other question marks.

Iran's foreign minister writes that traffic is open "through the coordinated route".

This raises the question of whether ships will still have to avoid previous shipping lanes, where Iran is suspected of having laid mines.

And it also suggests that Iran will continue to have control over which ships pass. "Completely open" may well turn out to be a truth with a modification.

And it all also depends on whether those who own the ships really dare to send their crews away or whether they want more guarantees.

Donald Trump seems to have been guilty of a so-called Freudian slip in one of his posts when he called the Strait of Hormuz the "Iran Strait".

Traffic is required to pick up

A Hormuz that is permanently under Iranian control will be very difficult for the world to digest, not to mention the countries in the region.

The talks between the US and Iran are to resume on Sunday in Pakistan. As usual in these contexts, the devil is in the details.

The next big question is about the future. How extensive is the damage to the oil facilities in the countries around the Gulf? How quickly can production resume?

According to energy analysts, we will have to live with higher oil prices for some time to come. Even after today's crash, the oil price is around 35 percent higher than before the war began.

But here and now, there is still the risk of a nightmare scenario, a continued restricted flow of oil through the Strait of Hormuz, which is significantly less than a couple of weeks ago. This also seems to be the assessment made by the market.

Of course, this requires that today's announcement is translated into reality and that traffic picks up quickly.

Everyone who has followed the events surrounding this war is already sobered up so that it will be enough and last for an entire lifetime.

However, it is important to remember that an open Strait of Hormuz cannot be considered a victory. It's just a return to what was true seven weeks ago.

How much political capital the Iran war has cost Donald Trump both at home and in his relations with the outside world remains to be calculated.