Iran’s Persian Gulf waterway authority announced that the Strait of Hormuz has reopened as of today within the 60-day framework agreed upon between Washington and Tehran. The decision pointed to a temporary decrease in the uncertainty in the Strait, which was one of the main risk factors in global markets after the war between the USA and Iran that started on February 28. The importance of the development for the cryptocurrency market is seen in the possibility of relieving some of the existing macro pressures rather than creating a new support.
Transitions begin again
According to the new regulation, ships must apply for passage at least 48 hours in advance and ensure route coordination around areas mined during conflicts. In return, Iran will waive security, safety, environment and insurance fees that it may request under normal conditions for a 60-day period. The zeroing of fees in this narrow waterway, through which approximately one-fifth of the world’s oil flow passes, is considered a strong signal that tensions are intended to be reduced in the short term.
According to the statement of the Persian Gulf waterway administration, ships that apply for appropriate passage in line with the Islamabad agreement and official instructions will be allowed to pass through the Strait of Hormuz for the announced period.
The Strait of Hormuz is known as a transit point that connects the Persian Gulf to the Arabian Sea and plays a critical role in global energy trade. For this reason, any disruption in the Bosphorus can affect not only the oil market but also a wide range of areas, from the inflation outlook to the central bank expectations.
What it means for markets
The reopening of the strait could provide relief on its own, but the removal of additional fees for 60 days indicates that the parties do not want to use the energy transit line as a pressure tool in the short term. This could lead to a temporary weakening of a significant macro pressure that has been acting on Bitcoin and other risky assets since the start of the war.
During the conflict, supply concerns originating from Hormuz pushed energy prices up, and this increase put additional pressure on global inflation. High and permanent inflation expectations also stood out as one of the factors that limited the US Federal Reserve’s hand in reducing interest rates. If tanker traffic approaches normal levels again, a downward movement in oil prices may be observed; This may again strengthen the markets’ expectations for looser monetary policy.
The risk has not been completely eliminated
However, the 60-day window does not completely eliminate the geopolitical risk premium. Iran retains the option to reinstate the charges when the deadline expires. In addition, control of the corridor has not changed and the mine risk that necessitates route coordination does not seem to have completely ended. For this reason, the current step is considered as a relief period for a certain period of time rather than a permanent normalization.
The main thing that has changed for now is that the cost of transporting oil through the Bosphorus has decreased to zero and the risk of a new supply shock has receded in the short term.
What to watch in the next 60 days
The indicators that markets will follow most closely in the coming period will be shaped in areas other than crypto. Crude oil prices come first; A sustained decline could indicate supply fears are weakening. The second important topic will be the course of the dollar. Interest rate cut expectations are generally priced first in the foreign exchange market and then in the broader risk asset group.
If a new sign of tension emerges around the Bosphorus, if the fees are brought back before the 60 days are up, or if there is data indicating that tanker traffic has not recovered, the risk premium may be priced again quickly. Therefore, the main factor for the market is that this relief will be limited in time as well as the fact that the tension has decreased.
