Reports indicate that the former US President stated that over the past two days, very good and productive dialogues have taken place between the US and Iran aimed at completely resolving hostilities in the Middle East. He has reportedly instructed the US Department of the Army to postpone all military strikes on Iranian power plants and energy infrastructure for a period of five days. This temporary halt is contingent on the success of the current talks and discussions. He also suggested that the suspension of attack plans is due to progress in negotiations to reopen the Strait of Hormuz. This statement follows a previous 48-hour ultimatum issued to Iran. However, citing sources, an Iranian news agency reported that there has been no direct communication, nor any contact through intermediaries, between Iran and the United States. They claim the decision to halt strikes was made after learning of Iran's potential retaliatory strikes on power plants across West Asia. Authorities in Tehran also pointed out that this move is intended to prevent further surges in energy prices and to buy time for military planning. An Iranian leadership source stated that there are no negotiations whatsoever between Iran and the US. They attributed the withdrawal of the attack threat to what they described as a decisive, powerful, and credible deterrent threat of retaliation from Iranian armed forces. They emphasized that their position regarding the Strait of Hormuz remains unchanged and will not change. Separately, a US source revealed that Turkey, Egypt, and Pakistan have been acting as intermediaries between the US and Iran over the past two days. The foreign ministers of these three countries have held talks with both a US envoy and the Iranian Foreign Minister. These mediation efforts are reportedly ongoing, making progress, and involve discussions on ending the conflict and resolving all outstanding issues, with a response expected soon.
Iran's Differential Navigation Policy: 'Green Light' for Non-US/Israeli Vessels, Market Panic Subsides Temporarily Iran is gradually establishing an exclusive passage mechanism for vessels not affiliated with the US or Israel through diplomatic consultations. This has become a key breakthrough in currently alleviating panic over energy supplies. Iran has explicitly stated that the Strait of Hormuz is closed only to vessels associated with "nations hostile to Iran," while allowing merchant ships from other countries safe passage. Communications have been initiated with major energy-importing nations such as South Korea and India. On March 23, two Indian-flagged liquefied petroleum gas carriers successfully transited the Strait of Hormuz, marking the first tangible signal of this policy's implementation. The Iranian Embassy in India also refuted rumors about charging a $2 million transit fee, further stabilizing market expectations. Regarding South Korea, following a conversation between the South Korean Foreign Minister and the Iranian Foreign Minister, Iran agreed to ensure the safety of stranded South Korean vessels. Efforts are underway to resolve passage issues for over 20 South Korean ships and more than 100 crew members. This differential strategy allows Iran to avoid international isolation that might result from a full blockade of the strait, while preserving a crucial channel for global energy transportation. It directly alleviates extreme market fears of a complete supply disruption and served as a key supporting factor for the sharp drop in oil prices following the announcement of the delayed US strikes.
Alternative Routes Fully Activated: Saudi Petroline Becomes Core, Capacity Bottlenecks Remain Against the backdrop of disruptions in the Strait of Hormuz, alternative oil transportation routes from Middle Eastern countries have been fully activated, serving as a "second lifeline" to ease supply pressures. Among these, the Saudi Petroline has emerged as the most critical. Saudi Petroline: The 'Emergency Trump Card' for Global Energy Markets The Saudi Petroline, a 1,200-kilometer pipeline laid over 45 years stretching from eastern oil fields across the Arabian Peninsula to the Red Sea port of Yanbu, has reportedly increased its daily throughput to 7 million barrels. Approximately 5 million barrels are designated for export, making it a core capacity for bypassing the Strait of Hormuz. Data indicates a five-day rolling average of crude exports from Yanbu port reached 3.66 million barrels per day, roughly half of Saudi Arabia's total pre-conflict exports, effectively filling part of the supply gap. Other Alternative Routes: Limited Capacity, Unable to Fully Compensate for the Shortfall UAE's Fujairah Pipeline: Has a daily capacity of 1.5 million barrels and can bypass the Strait of Hormuz, but has suffered recent attacks, leading to a brief shutdown before resuming operations, indicating instability. Iraq-Turkey Pipeline: An agreement allows Iraq and the Kurdistan Regional Government to export via a pipeline to the Turkish Mediterranean coast. However, its daily capacity is far lower than Iraq's normal export volume of around 3 million barrels per day from the Persian Gulf, making its contribution relatively minor. Oman's Duqm Port: Plans are underway to develop it as a regional alternative hub with storage facilities. Long-term proposals include a cross-peninsula pipeline connected to Saudi crude, but no effective capacity can be established in the short term. Overall, the theoretical total capacity of existing alternative routes is less than 8 million barrels per day. Given that daily traffic through the Strait of Hormuz exceeds 20 million barrels, a daily supply shortfall of over 10 million barrels persists, making it difficult to fundamentally resolve the supply tightness.
Practical Impact of Dual Measures on Oil Prices: Short-Term Cooling, Long-Term Concerns Remain Short-Term: Geopolitical Premium Fades, Oil Prices Correct Sharply The implementation of Iran's differential navigation policy, coupled with the postponement of US military strikes, directly led to a rapid unwinding of geopolitical risk premiums. Prices fell significantly, with one benchmark crude experiencing a drop of over 14% intraday before settling with a substantial loss. Another benchmark also fell sharply intraday. Market panic sentiment has noticeably eased. Concurrently, the efficient operation of the Saudi Petroline and the release of strategic petroleum reserves by consuming nations have collectively formed a "supply buffer," helping to prevent uncontrollable price spikes. Long-Term: Three Major Concerns Limit the Downside for Oil Prices Persistent Capacity Bottlenecks: The total capacity of alternative routes is only about 40% of the Strait of Hormuz's volume. Furthermore, these routes face multiple constraints including port loading efficiency, pipeline maintenance, and security threats, limiting the actual incremental supply that can be released. Uncertainty in Navigation Mechanism: The definition of "non-hostile vessels" and safety coordination standards are unilaterally controlled by Iran. Additionally, the Bab el-Mandeb Strait remains under threat, potentially cooperating with Iran to block the passage, which could reignite market volatility. Warnings of Extreme Risk: Analysis suggests that if flow through the Strait of Hormuz were sustained at a fraction of normal levels for an extended period, oil prices could surpass previous historical highs. The fundamental logic of long-term supply tightness remains unchanged.
Conclusion: Alleviation, Not Reversal; Oil Prices Remain in a High-Range Battle The combination of Iran's differential navigation policy and the activation of alternative routes can only provide short-term relief from upward pressure on oil prices. It cannot fundamentally reverse the underlying tight supply格局. The core direction of oil prices currently depends on two key variables: first, whether the navigation mechanism negotiated by Iran with various countries can be fully implemented and when overall transit through the Strait of Hormuz will be restored; second, whether Saudi Arabia and other countries can sustainably increase the capacity of alternative routes while ensuring the security of ports and pipelines. In the short term, with the opening of a five-day diplomatic window, oil prices are likely to maintain high-level volatility. If transit through the strait remains obstructed for a prolonged period, even with alternative routes operating at full capacity, the risk of oil prices moving higher persists, continuously exposing the fragility of the global energy market.
As of the latest update, the front-month futures contract for one major international crude benchmark was trading around a specific price point.
