The strait is open! Now what?

TL;DR

A US-Iran ceasefire reopened the Strait of Hormuz for 14 days, but prices remain elevated and lasting peace depends on unresolved nuclear and proxy disputes.

Key Points

• 1.Pakistan brokered a 14-day ceasefire starting April 8th. Iran's Supreme National Security Council agreed to halt operations if attacks stopped, reopening the Strait of Hormuz under Iranian military coordination, with ships paying ~$2 million per transit.
• 2.Iran's ten-point plan is the basis for negotiations, not the US plan. Iran's demands include no-aggression guarantees, lifting all primary and secondary sanctions, uranium enrichment rights, US troop withdrawal from the Middle East, and compensation payments.
• 3.The US's confidential 15-point plan clashes with Iran on key nuclear issues. It demands Iran dismantle nuclear facilities, hand uranium stockpiles to the IAEA, abandon proxy militias like Hezbollah and the Houthis, and limit its missile program.
• 4.Energy and food prices dropped after the announcement but remain well above pre-war levels. Brent crude, WTI, European natural gas, diesel, and kerosene all fell on the news, but full price relief will take weeks or months.
• 5.Four structural reasons keep prices elevated even with the strait open. Ship insurance premiums remain high, vessels are slow, Gulf production capacity was damaged, and countries worldwide are now hoarding critical energy and food supplies as a precaution.
• 6.Israel is the biggest threat to a permanent peace deal. Iran insists the ceasefire covers Lebanon operations, but Israel denied this; analysts believe Israel may actively try to sabotage a deal, while the US–Iran positions on nuclear issues and proxies have more overlap than expected.