Iraq has restarted its southern oil exports after a significant pause caused by disruptions in the Strait of Hormuz. The market indicates that by April 30, there is a 69.5% likelihood of traffic in the Strait returning to normal. This figure shows a drop from 60% just a day prior.
Despite Iraq's renewed oil shipments, the market for the expected normalcy by April 30 has decreased about 10 points in a day. This situation suggests that while Iran may be permitting some transit through the Strait, traders remain skeptical about the timeline.
Looking ahead to May 31, the market anticipates a 90% likelihood, demonstrating that traders expect a resolution, albeit with doubts about meeting the April deadline. Iraq's decision to export oil again signals at least partial cooperation from Iran, which may reduce the risk of immediate tensions.
What are the chances of UK warship activity in the Strait? Currently, the market estimates only a 9.5% chance of UK naval presence by April 30. While Iraq successfully resumes oil exports, traders view minimal potential for immediate UK naval actions. This market sees daily face values at $24,906, but the actual USDC transactions amount to only $2,086, indicating limited real liquidity.
The resumption of Iraqi exports serves as a positive signal of de-escalation amidst the ongoing Iran-US-Israel tensions. Currently valued at 50.5¢, a YES share for the April 30 deadline pays $1 if resolved. However, the order book depth shows only $354 needed to shift the price by five points, making minor trades capable of triggering significant price fluctuations.
Investors should be observant of any statements from the US 5th Fleet or the IRGC Navy that could rapidly influence the market. Confirmation of increased shipping or allied naval activities in the Strait would provide the most definitive signals regarding the situation's stability.