Iran-Oman Strait of Hormuz deal may ease oil risk

That helps explain the market sensitivity. WTI crude, tracked by USO, had been trading around $116.37 on Aug. 4 after a violent run-up earlier in the year that took the fund as high as $152.96 in May, while the 50-day moving average and RSI readings point to a market that has cooled but remains highly responsive to headline risk. Oil-sensitive equities, including the energy sector ETF XLE at $57.90 and oilfield services fund OIH at $388.54, have also stayed in focus as traders weigh the chance of a diplomatic de-escalation against the risk of fresh disruptions.

The timing is fragile. A Liberian-flagged vessel was struck by an unidentified projectile near the strait, forcing the crew to abandon ship and leaving one person missing, underscoring how quickly shipping risk can reprice crude and shipping insurance. The report also said as many as 80 Hong Kong-linked vessels were stuck around the waterway, highlighting the operational cost of uncertainty even before any formal reopening.

Bond and credit markets are also positioned for the fallout from either outcome. The U.S. 10-year Treasury yield was near 4.75%, while high-yield credit spreads sat around 2.85 percentage points, levels that suggest investors are still balancing resilient growth and sticky inflation against the possibility that an oil shock could complicate the outlook for central banks.

For investors, the key question is whether a deal would mark a durable easing in Gulf risk or just a temporary pause. Adalytica’s oil trade signals showed a sharp jump in sentiment to 77, while its OPEC policy gauge sank to “Extreme Fear,” reflecting how quickly traders are shifting between hopes for stability and concern over supply retaliation. The next catalyst is whether the reported Iran-Oman deal is finalized and whether any further attacks follow before shipping normalizes.