Chua Yeow Hwee, an economist from Singapore’s Nanyang Technological University, said: “Oil prices are likely to remain elevated because expectations now depend on whether the blockade is fully implemented, whether shipping disruptions spread, and whether diplomacy resumes.”
Analyst Saul Kavonic from financial services firm MST Marquee told the BBC “oil prices are not as high as they normally would be” given the scale of disruption to supplies because traders still hope shipments will resume soon.
“But if that doesn’t happen, oil prices will head higher,” Kavonic added.
David Satterfield, former Special Envoy for Middle East Humanitarian Issues, also pointed out that it is not just oil and gas that is shipped through the Strait of Hormuz.
“It is about 30% of the world’s aluminium, it is 30% of the world’s helium, it is up to 50% of the feed stocks for fertilizers around the world and it is about 17% of all polymers,” he told the BBC’s Today programme.
“The impact, if this goes on for several more weeks, is going to become quite profound beyond the cost of petrol and diesel at the pump.”
There is also the question of whether the two-week ceasefire will hold, according to Marcus Baker, global head of marine and cargo at risk insurance firm Marsh.
“Will the Iranians decide that actually, despite what the US has said, they will continue to honour the ceasefire?” he said.
“Clearly, if that happens we will get much more confidence coming back into the market and I think the durability of that ceasefire is really critical to what happens next.”
Stock markets in Europe trimmed earlier falls but were still trading down at midday.
The UK’s FTSE 100 fell 0.35%, while France’s Cac index dipped by 0.8% and Germany’s Dax index dropped 1%.
Major stock indexes in Asia closed down. Japan’s Nikkei 225 in Japan ended 0.7% lower and South Korea’s Kospi fell 0.9%.
Countries in Asia have been hit especially hard by the fallout of the Iran war as they are heavily reliant on oil from the Middle East.
US stocks opened lower on Monday with the deadline for Trump’s blockade of Iranian ports looming.
The Dow Jones Industrial Average was 0.8% lower, while the Nasdaq and S&P 500 indices each fell by 0.3%.
