Financial markets rebounded sharply on Thursday following Iran’s announcement of a proposed protocol with Oman to monitor and charge tolls on ships transiting the strategic Strait of Hormuz. Deputy Foreign Minister Kazem Gharibabadi stated the measures aim to "facilitate and ensure safe passage," easing fears of prolonged disruption in the critical oil shipping route.
Market Impact
Wall Street, initially poised for losses after President Trump’s Wednesday night address hinted at escalating tensions with Iran, turned positive as equities recovered ground. Oil markets remained volatile, with U.S. crude surging nearly 9% to $108.95 a barrel, while Brent climbed over 5% to $106.55. The unusual price spread between U.S. and Brent crude reflects traders’ anticipation of higher costs in May compared to June, a trend known as backwardation.
Iran’s Economic Gain
Amid the turmoil, key figures in Iran’s leadership, including Supreme Leader Mojtaba Khamenei and oil mogul Hossein Shamkhani, have reportedly profited significantly from the disruption. A temporary U.S. sanctions waiver has allowed Iran-linked vessels to transport crude, funneling profits to intermediaries rather than the Iranian state. Iranian lawmakers have claimed the country is charging vessels up to $2 million for passage, doubling oil export revenues since the conflict began.
Former U.S. Treasury official Miad Maleki noted, "Most of the money is being pocketed by intermediaries like Khamenei and Shamkhani rather than the Iranian state itself."
Political Stalemate
The proposed collaboration between Iran and Oman hinges on peacetime conditions, yet Iran remains in a state of war, casting doubt on the protocol’s near-term feasibility. President Trump’s pledge to escalate military action over the next few weeks further complicates prospects for détente. Iran, meanwhile, continues to demand international recognition of its sovereignty over the strait as a precondition for peace.
As markets rally on hopes of stability, the economic and geopolitical stakes in the Strait of Hormuz remain high, with Iranian leaders leveraging wartime disruptions for significant financial gain.