Meanwhile in Hormuz

The chart of the day shows the strong normalization of tanker traffic through the Strait of Hormuz. After the recent geopolitical shock, the number of vessels crossing the area has sharply recovered across all major categories, including crude oil tankers, product tankers, LNG and LPG carriers.
For oil, the message is quite simple. The physical flow of energy is normalizing and the market is taking out the geopolitical risk premium. Crude is now back below USD 70, down from a high of USD 113 at the beginning of April in the midst of the Iran crisis.
This is clearly supportive for markets. Lower oil prices mean less pressure on inflation, less pressure on central banks, and a better environment for risk assets. The geopolitical risk has not disappeared, but for now the market is telling us that Hormuz starts functioning again.