The oil market is at a standstill. Speculators do not know which direction to move: there is too much news, but no clear trend. The main factor of uncertainty is the Strait of Hormuz, through which a significant portion of global oil supplies pass. The situation is complicated by the fact that control over the region is effectively concentrated in the hands of one person with too much influence.
Brent, which reacts most strongly to events in the Middle East, initially rose by 2.5% to $98.47 per barrel. The reason was threats of retaliation from Iran’s Islamic Revolutionary Guard Corps after US airstrikes.
Later, the growth intensified: Brent gained 4.1% and climbed to $100.11. WTI oil was last traded at $93.91, which is 2.8% below Friday’s levels, but still better than Monday’s figures.
At the beginning of the week, prices fell sharply amid expectations that the parties could soon agree on a peace deal.
Iran Demands Payment for Passage Through the Strait of Hormuz as Traders Avoid Oil Deals
Iran may demand a permanent fee from ships passing through the Strait of Hormuz as part of a possible peace agreement with the US. Under this scheme, Iran and Oman would receive joint control over the route, and ships would begin to be charged a so-called environmental or transit fee.
Tension in the market was rising even before talk of possible fees appeared. On Tuesday, US Central Command called new strikes on Iran defensive actions.
Meanwhile, Donald Trump said over the weekend that an agreement between the parties could be reached soon after three months of conflict.
See Also: Tether and Georgia Prepare GELT Stablecoin Based on Lari
As a result, the market is simultaneously receiving signals of both continued war and possible peace. Because of this, traders prefer not to take risks and are taking a wait-and-see approach.
S&P Global Energy President Dave Ernsberger said that conflicting signals have literally paralyzed the market.
“People are afraid to open positions when there are so many conflicting statements about the course of negotiations,” he told CNBC.
According to Ernsberger, the main question now is whether global markets and governments will even agree to allow such fees for passage through the strait.
“The very principle of freedom of maritime trade is at stake here, as well as what precedent this will set,” he noted.
There Are Almost No Tankers, but Micron and Hyperliquid Deals Are Blowing Up the Market
Even if the Strait of Hormuz reopens after a possible agreement, oil supplies will not recover instantly. According to Dave Ernsberger, the situation with shipping remains extremely tense.
“In practice, very few oil tankers are passing through the strait right now. If 10 ships enter in a day, it’s good if at least two of them are carrying oil,” he noted.
In his estimation, it could take about two months to restore normal oil supply volumes from Qatar, Iraq, and Saudi Arabia. Full restoration of logistics and shipping will take almost a year.
While the oil market is on pause, crypto traders have switched to more aggressive deals.
See Also: Investors Withdraw Billions from BTC and ETH ETFs and Move to HYPE
Shares of Micron Technology on Tuesday exceeded a market cap of $1 trillion after a sharp rise in prices. Against this backdrop, one trader on Hyperliquid earned more than $6.2 million in unrealized profit on a leveraged trade with Micron shares.
Wallet 0x577…95fd2 opened a triple long position on 22,188 contracts MU from May 6 to 8 with an average entry price of $575.25. When Micron shares rose above $879 during trading and gained 17%, the position’s value exceeded $18.8 million.
On the Stocktwits Micron platform, it is currently the most discussed ticker among retail investors. Sentiment on the stock remains bullish, although the level of discussion has decreased slightly in the past day.
The HYPE token from Hyperliquid also hit a new all-time high, rising above $63. In the past day, the asset gained more than 10%, and since the beginning of the year, its growth has exceeded 144%, according to CoinGecko. Interest in the token and activity on social media are now at extremely high levels.
Back on May 22, before the three-day market closure, Donald Trump said: Micron is a great company, adding that the chipmaker could invest more than $100 billion in New York.
After the markets opened on Tuesday, Micron shares soared by 19%, and the company’s market cap grew by about $150 billion in just one day. In the past 12 months, the company’s value has increased from $70 billion to $1 trillion.
