FX.co ★ Traders hold fire, awaiting Hormuz ultimatum expiry following Trump's delay of strikes

Oil traders have largely ignored President Donald Trump’s ultimatum to Iran on reopening the Strait of Hormuz after the president postponed strikes on Iran’s energy infrastructure for five days following a round of talks, Bloomberg reported.

Participants in the oil market have adopted a neutral stance, awaiting the expiry of the five‑day ultimatum, the report said. Traders have largely priced in the risk of verbal escalation into current crude valuations, which have reached levels not seen since mid‑2022.

“The market has reached a state of rhetoric saturation, and the pricing of threats like 'total destruction' is already reflected in a triple‑digit price per barrel,” Stefano Grasso, a market analyst, said.

Since the start of the military confrontation, global equity market capitalization has fallen by about $11.5 trillion. “Given the high stakes involved — essentially a binary outcome where either tensions de-escalate or there is a massive escalation, market participants simply cannot ignore this enormous approaching risk on the horizon of human society,” Michael Brown, a research strategist at Pepperstone Group, said. Most market participants prefer to pare existing positions while waiting for the five‑day deadline to pass.

Global bonds have lost more than $2.5 trillion in value as the Bloomberg dollar index rose about 2%. Fund managers are modeling the macroeconomic consequences should diplomatic efforts fail, and a strike on Iranian power infrastructure take place.