Analyst: Market Not Betting on Long-term Hormuz Closure or Third Oil Crisis

BlockBeats News, April 17th. Ryoji Musha, President of Japan's Musha Research, stated that the significant gap between media-reported pessimism and actual market behavior cannot be ignored. Since the outbreak of the Iran conflict on February 28th, the S&P 500 Index has fully recovered and returned to a level just 1% below its all-time high. Although the recent spot price of crude oil futures remains high, the price of contracts for delivery in six months has fallen back to the $70 range. Therefore, the market is not assuming a long-term closure of the Strait of Hormuz or the occurrence of a third oil crisis.

In addition, Musha pointed out that the global economy's reliance on oil is no longer as high as it was in the 1970s, and Japan's share of oil in its energy mix has decreased from 76% during the first oil crisis to 35% in 2024. Alternative routes such as oil pipelines from Saudi Arabia and the UAE already exist, and a long-term closure of the Strait of Hormuz is also not in Iran's interest since the strait is crucial to Iran's trade. Japan remains vulnerable to a rise in import energy and transportation costs, but the market no longer seems poised for a full-blown oil crisis outbreak. (Markets Insider)