After the ceasefire, the market focuses on negotiations, and this time Iran holds greater leverage.

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The two-week ceasefire has temporarily eased tensions in the market, shifting the focus from airstrikes to the negotiating table. Meanwhile, Iran’s “new controls” over passage through the Strait of Hormuz are becoming a harder bargaining chip, determining whether the oil price risk premium can truly recede.

After Trump announced on Tuesday he had accepted a two-week ceasefire proposal, global major markets quickly priced in a cooling of the worst-case scenario. Within an hour of the announcement, oil prices fell by 11%. On Wednesday, Brent crude plunged by as much as 16%, with risk asset sentiment recovering in tandem.

However, the terms of the ceasefire and subsequent progress in negotiations remain highly opaque. White House press secretary Karoline Leavitt urged caution after the announcement, saying reports about offline talks should only be considered official upon Trump’s formal announcement.

At the same time, the market is more concerned about whether Iran’s vague signal to “allow more shipping through” actually means oil tanker transit through the Strait of Hormuz has substantially resumed. If Iran moves ahead with its plan to charge transit fees to oil tankers, shipping costs and energy prices may remain elevated during the ceasefire period.

Wallstreetcn previously published an article, reporting that U.S. intelligence agencies assessed the Strait of Hormuz is unlikely to be "fully open" in the short term. A former CIA director bluntly stated Tehran knows full well that controlling the strait "is more powerful than nuclear weapons."

Oil price plunge reflects "withdrawal of the worst-case scenario," but downside is limited

The ceasefire news triggered a swift oil sell-off, highlighting the market’s prior concentrated pricing of escalation risk. Since the outbreak of the conflict at the end of February, WTI crude had surged nearly 70%, pushing U.S. gas station prices back above $4 per gallon for the first time in years.

The sharp drop following Trump’s announcement illustrates the uncertainty over his next moves had already been accumulating among traders.

For investors, the ceasefire now shifts the variable from “whether fighting will continue” to “whether negotiations can suppress the energy risk premium.”

Kevin Book, managing director of ClearView Energy Partners, said the market will treat the pause as a major signal, as it includes the promise to “reopen the Strait of Hormuz.”

However, he also mentioned it will be difficult for oil prices to decline significantly, “the lower end of the range will return to around 100 dollars per barrel.” He added that if Trump proceeds with threatened strikes and triggers Iranian reprisal, prices could reach a level where “the sky’s the limit.”

The Strait of Hormuz becomes the core target as Iran’s bargaining power grows

The variable most sensitive to negotiations and pricing is focused on transit arrangements for the Strait of Hormuz.

The five-week conflict may have increased, rather than diminished Tehran’s influence on the global economy. Iran asserted control over the Strait of Hormuz during the conflict, virtually shutting passage to parties it considers hostile, and sought to collect fees from oil tankers passing through.

Clayton Seigle, senior fellow at Washington think tank CSIS, said, “Iran is extremely unlikely to give up its newfound control or claims over the strait.” This means that even if the ceasefire holds, the market still has to pay a risk premium for “whether passage will continue to be restricted, whether costs will rise.”

This concern has already entered the U.S. domestic political agenda. Democratic Senator Chris Murphy warned in a CNN interview that if the agreement consolidates Iran's control over the Strait of Hormuz, the impact would be “catastrophic” for the world. He also pointed out that Trump’s statements and Iran’s statements are “completely different,” which in itself suggests the agreement is not solid.

Iran says the U.S. has pledged to fulfill multiple obligations in principle, Trump says “most terms have been fully negotiated”

According to CCTV, Iran claims that the U.S. has committed in principle not to conduct further military action and has acknowledged Iran’s continued control over the Strait of Hormuz.

Trump's side says there is a “strong framework” for a long-term agreement on the Iran issue, and most terms in Iran’s proposal have already been fully negotiated.

Jonathan Panikoff, Middle East project director at the Atlantic Council, believes that a permanent solution needs to address Iran’s nuclear and missile programs, buried highly enriched uranium, and issues of freedom of navigation.

In an AFP interview after the ceasefire announcement, Trump said Iran’s uranium supply would be “perfectly handled,” but declined to explain how, and called the agreement a “complete and total victory.”

The U.S. “exit strategy” within the two-week window and lingering political and economic pressures

Trump's decision has a clear “last minute” character; he did not fully learn about the Pakistani proposal until about two hours before posting his Truth Social ceasefire message.

Jennifer Kavanagh of Defense Priorities wrote that even though Trump chose to pull back, it was done in “the worst way,” raising the stakes in advance, maximizing damage to his credibility and the global perception of U.S. power, constituting a “clear strategic failure.”

Republican party rifts are also widening. Texas Congressman Nathaniel Moran expressed concern on social media about the U.S.’s deviation from long-term national defense principles. Wisconsin Senator Ron Johnson said striking civilian infrastructure would be a “huge mistake,” stressing that the laws of war must be observed.

Former allies including Tucker Carlson, Marjorie Taylor Greene, and Anthony Scaramucci have called for Trump’s removal over his threatening statements, while intervention supporters like Laura Loomer and Senator Lindsey Graham have also raised questions about the ceasefire arrangement.

In the next two weeks, the market will watch for clues on whether the strait truly reopens, whether transit fees and higher logistics costs emerge, and whether public statements from the U.S. and Iran converge. The ceasefire has eased the immediate shock, but uncertainty in negotiations and Iran’s new bargaining chips regarding the strait will continue to dominate pricing of energy and risk assets.

Risk Warning and DisclaimerThe market carries risks, and investment requires caution. This article does not constitute personal investment advice nor does it take into account the individual investment objectives, financial situation, or needs of any user. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investments based on this article are made at one’s own risk. ```