Barely weeks after Washington and Tehran announced what was presented as a breakthrough interim peace agreement, events in the Strait of Hormuz have once again reminded markets that geopolitical agreements are only as credible as the willingness of both parties to respect them. Three commercial vessels, including a Qatari LNG carrier and a Saudi crude oil tanker, were attacked within a single day, marking the most serious escalation since the ceasefire was announced. The United States responded with a large-scale military operation targeting more than eighty Iranian military assets while simultaneously revoking the sanctions waiver that had temporarily allowed Iran to resume oil exports. The message from Washington is unmistakable. Freedom of navigation remains a strategic red line. The message from Tehran is equally clear: Iran continues to consider itself the ultimate authority over significant parts of the Strait of Hormuz and remains prepared to challenge any shipping route it does not explicitly approve. The result is that the ceasefire increasingly resembles a tactical pause rather than the beginning of lasting stability.

Markets reacted immediately. Brent crude moved back above USD 76 per barrel while European natural gas prices jumped sharply. More importantly, shipping companies are once again reassessing the risk of transiting one of the world’s most strategic maritime corridors. Even vessels continuing to cross the Strait are increasingly sailing without active transponders or choosing different routes according to their own assessment of military risk. This matters far beyond the Gulf. Around one fifth of global oil trade normally passes through Hormuz. The temporary reopening of the corridor had encouraged markets to price in the return of excess supply, particularly as OPEC+ was preparing another increase in production quotas. That narrative is now under pressure. The issue is no longer simply whether enough oil can be produced. It is whether that oil can be delivered safely and predictably to global markets. The US decision to revoke Iran’s oil export waiver also represents an important turning point. The waiver had been one of the principal incentives offered to Tehran under the interim agreement. Its removal effectively changes the economic framework of the negotiations and substantially raises the political cost for Iran of returning to meaningful discussions.

For investors, this episode reinforces a broader point that has become increasingly evident over recent months. Energy markets are entering a structurally more volatile regime. Even if large-scale military conflict is avoided, repeated disruptions to shipping, insurance costs and transport routes are likely to create periodic spikes in energy prices. Unlike previous geopolitical crises, these shocks occur while inflation remains above central bank targets and public finances across developed economies have become significantly more constrained. This leaves monetary authorities in an uncomfortable position. Higher energy prices continue to generate inflationary pressure, yet central banks have limited room to tighten policy aggressively without threatening already fragile economic growth.

This is precisely the environment we have been highlighting for several months. Nominal interest rates are likely to remain relatively elevated while real rates stay close to zero. Inflation becomes persistent rather than transitory, and markets must learn to operate without assuming that central banks will automatically stabilise every external shock. The recent strengthening of the US dollar should also be interpreted within this framework. Higher US yields and renewed demand for safe-haven assets naturally support the dollar during periods of geopolitical stress. However, this does not alter our longer-term view. Structural fiscal deficits, rising government debt and the gradual diversification of global reserve assets continue to argue for a gradual weakening of the dollar over the medium to long term once the current episode subsides.

Perhaps the most important lesson from Hormuz is that geopolitical risk has become structural rather than cyclical. Markets are no longer dealing with isolated crises that appear and disappear within weeks. Instead, investors must adapt to a world where repeated disruptions to trade routes, supply chains and energy markets become part of the investment landscape itself. That does not necessarily imply permanently higher oil prices. It does imply permanently higher uncertainty. And uncertainty, rather than the absolute level of oil prices, may well become the defining macroeconomic variable of the coming years.