Brent slips to $112.85 after Monday’s 6% surge, but ING says ‘you could say the
ceasefire has ceased.
Tuesday opened with one of the most expensive question marks in the global economy
hovering over the Strait of Hormuz: is the US-Iran ceasefire still alive, or did it die in the smoke
rising from a UAE oil port?
By the time European traders sat down at their desks this morning, Brent crude had slipped
1.3 percent to $112.85 a barrel and US WTI was off 2.5 percent at $103.78 – a measured
pullback after Monday’s 6 percent spike. But that surface calm masks something much more
anxious underneath. Strategists at Dutch bank ING wrote in a Tuesday note that the latest
volley of attacks in the Persian Gulf reflects “the first signs of the US-Iran ceasefire breaking
down,” and one ING analyst told Fortune flatly: “You could say the ceasefire has ceased.”
The trigger came overnight Monday. The United Arab Emirates accused Iran of firing 15
missiles and four drones at the country, the first direct strike on Emirati territory since Tehran
and Washington signed a ceasefire on April 8. UAE air defences engaged most of the
projectiles, but at least one drone slammed into the Fujairah Petroleum Industries Zone,
igniting a major fire and wounding three Indian nationals. Abu Dhabi National Oil Company
shut down its 922,000-barrel-per-day refinery at the site as a precaution.
Hours earlier, the US military said it had engaged Iranian forces and sunk seven small fast
boats in the strait, claiming they were targeting civilian shipping under President Donald
Trump’s newly launched Operation Project Freedom – a US Navy convoy programme guiding
neutral commercial vessels through Hormuz. Two American-flagged ships and two US
destroyers crossed into the Persian Gulf on Monday under that programme. Iran disputes the
framing, claiming the boats hit were passenger vessels.
Trump’s Tuesday morning posture is itself a market signal. Asked directly whether the
ceasefire still stands, the President declined to confirm or deny. He told reporters the United
States now has “control” of the Strait of Hormuz – “We took it over from them” – and projected
that the conflict could continue for another two to three weeks
Iran’s response has been bluntly hostile. Foreign Minister Abbas Araghchi labelled the US
convoy programme “Project Deadlock,” while Ali Abdollahi, head of Iran’s unified military
command, warned that any US force entering the strait will be attacked. India, whose nationals
were wounded at Fujairah, has formally condemned the strike, with Prime Minister Narendra
Modi calling the targeting of civilians and infrastructure “unacceptable.”
The Fujairah hit is strategically loud because Fujairah was supposed to be the workaround.
The port sits at the end of the Abu Dhabi Crude Oil Pipeline, the route Gulf producers built
specifically to ship oil without going through Hormuz. By striking it, Iran is signalling that even
the bypass is now in play.
For consumers, the math is starkly visible at the pump. US gasoline averages have hit $4.46 a
gallon – the highest in nearly four years – and analysts have begun openly discussing $5 a
gallon if the strait remains contested. Kenya, Pakistan and several African nations have
already moved to relax fuel quality rules to keep imports flowing.
What to watch in the next 24 hours: whether ADNOC restarts its Fujairah refinery, whether US
Central Command runs a second escorted convoy through the strait, and any move by Iran’s
Supreme National Security Council to formally declare the ceasefire dead. Oil futures are
pricing all three.
For now, the ceasefire is in a state of limbo – publicly intact, operationally invisible, and
increasingly hard to find on a map of the Gulf.
