The reopening of the critical maritime corridor follows a high-level agreement signed by President Trump, Vice President Vance, and Iranian parliamentary speaker Qalibaf. Markets have reacted swiftly to the news, with global banks including Goldman Sachs and Morgan Stanley downgrading their Q4 2026 price forecasts by $10 to an average of $80 per barrel. Despite the cooling effect on energy prices, regional supply remains volatile as ADNOC floods Asian markets with 30 million barrels of spot crude, contributing to a regional overflow.

Simultaneously, China is grappling with significant demand destruction. Crude throughput in the country has plummeted 9.1% year-over-year to 12.7 million barrels per day, the lowest level since April 2022. This contraction is underscored by a 0.6% drop in Chinese retail sales—the first decline since the pandemic—suggesting that consumer spending remains highly sensitive to energy-driven volatility. While Beijing attempts to incentivize exports, the national crude inventory has begun to shrink, shedding 20 million barrels over the last two months as the industry adjusts to the new geopolitical reality.