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Prolonged Hormuz Shipping Disruptions Likely to Linger Despite Peace Signals, RBC Says

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Maritime disruptions in the Strait of Hormuz and the Red Sea are likely to persist despite renewed hopes of a deal, as attacks continue and key obstacles to a lasting agreement remain, RBC Capital Markets strategists said in a Wednesday note.

One week after Washington's deal messaging sent prices lower, similar comments from Pakistani officials also raised hopes for a reopening, but vessel attacks continued in both waterways, RBC said.

US forces attacked a Panama-flagged ship in the Gulf of Oman Tuesday after it attempted to break the US blockade, while a Houthi attack killed six mariners near the Bab el-Mandeb earlier this week.

Iran's demands for formal control rights over the Strait of Hormuz and an upfront cash settlement remain key barriers to a deal, with Washington rejecting both conditions, RBC said.

RBC said deal-related headlines continue to have an outsized impact on prices nearly six months into a war that was initially expected to last only several weeks.

Despite repeated peace signals that failed to produce agreements, RBC said each renewed escalation is occurring as supply and shipping buffers shrink, leaving some market participants likely to sell when fresh deal headlines emerge.

While markets appear to be pricing a return to January conditions, RBC said shipping disruptions and infrastructure repairs could last well beyond any move by President Donald Trump to end the conflict.

A significant share of the shipping industry could remain away from Hormuz for an extended period because of mine, missile, drone and Tehran toll risks, while producers such as Iraq already faced multi-month recovery periods.

RBC remains doubtful that a durable deal is close enough to restore regular maritime traffic and restart infrastructure, while opposition to any agreement seen as capitulation could further hinder a lasting settlement.

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