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Executive Summary
A note on timing. This analysis was finalised as the US-Iran track moved decisively toward resolution. On 15 June 2026, the two sides confirmed an interim peace agreement to reopen the Strait of Hormuz and lift the US naval blockade, with formal signing scheduled for 19 June in Switzerland. Oil and gas prices, which had soared with the closure, slumped on the news, while equities and bonds rose. We are nonetheless publishing this assessment in full, because its value is not the prediction of a single outcome but the structured framework behind it. The deal closely tracks the de-escalation pathway this report rated as most likely, and the analysis remains directly relevant to how the reopening, the fragile ceasefire, and the unresolved nuclear file now unfold.
The structural picture. The Strait of Hormuz had been effectively closed since the US-Israeli strikes on Iran of 28 February 2026, a disruption lasting roughly three and a half months. The strait carries close to a fifth of globally traded oil, and few alternatives exist for moving Gulf hydrocarbons to market. Yet the price response was severe rather than catastrophic. Brent peaked near USD 128 per barrel on 2 April, averaged USD 107 in May, and traded in the low-to-mid USD 90s in early June before the agreement pulled it lower. The pre-conflict worst-case range of USD 150 to USD 300 never materialised, because three structural buffers absorbed the shock: coordinated strategic-reserve releases exceeding 400 million barrels, demand destruction of roughly 1.1 million barrels per day in 2026, and a deterrent diplomatic backdrop that made large directional positions impractical.
The framework. This assessment treats the conflict as a state-transition system rather than a single forecast, mapping three pathways from the deadlock. The most likely was negotiated de-escalation with phased reopening, estimated at 0.45 to 0.55. The 15 June agreement, which provides for immediate and permanent termination of operations on all fronts including Lebanon, and signing on 19 June, falls squarely within this pathway. The second was protracted volatility, 0.30 to 0.40, a grinding closure holding prices structurally higher. The third was regional war, a low-probability, high-impact tail at 0.10 to 0.20.
The risk that remains. A signed framework is not a settled peace. The April ceasefire collapsed within days when Israeli strikes on Lebanon prompted Iran to re-close the strait, and the same fault lines persist. The agreement is interim, the nuclear file awaits a second and more detailed accord, and enforcement of the reopening is unproven. Implementation, not announcement, is the real test.
The implication for decision-makers is unchanged. Even with reopening underway, exposure should be hedged against a reversal, alternative corridors treated as durable infrastructure, and the ceasefire indicators monitored closely. Resilience comes from preparedness across coherent scenarios, not from a single headline.
