Wolfe Research on the recent Strait of Hormuz drama

Investing.com - Wolfe Research said Thursday that Iran's announcement to reopen the Strait of Hormuz represents a constructive signal despite open questions about the scope of the change. The firm noted that paper oil futures sold off sharply following the announcement, while U.S. equities rallied in a more measured fashion.

Iranian Foreign Minister Araghchi declared passage for all commercial vessels through the Strait of Hormuz completely open for the remaining ceasefire period on the coordinated route already announced by Iran's Ports and Maritime Organisation. The announcement did not explicitly address tolls, though the firm said it is implied there will be none. Iran's foreign ministry office later clarified the move was "nothing new" and just ceasefire implementation, while Iranian state media criticized the positive tone.

Wolfe Research said ship operators' comfort remains the key factor in restoring flows, with initial signals positive but tentative. The Norwegian Shipowners' Association said several issues must be clarified before ships can transit, including the presence of mines, Iranian conditions and practical implementation. German shipping group Hapag-Lloyd indicated "probably we will pass soon" after initially stating it was still refraining from passing through the strait.

President Trump indicated to the press that a deal is likely by this weekend and posted on Truth Social that "the Hormuz situation is over." He also thanked Pakistan, Saudi Arabia, the UAE and Qatar in separate posts. Wolfe Research noted Iran had already agreed to complete, immediate and safe opening of the Strait as part of last week's ceasefire.

The firm said if traffic resumes at scale in the near term, that would be significant, though it may take time to get new tankers into the Gulf to load cargoes before shut-in production can fully ramp back up. Wolfe Research noted the announcement reduces downside risk even more clearly than it promises to immediately restore shipping flows.