Morning wrap (20.04.2026)

Oil prices are rising at the open after Iran re-imposed restrictions in the Strait of Hormuz. The move reversed last week’s partial reopening and reignited supply concerns.

Prices later pulled back slightly as the market began to factor in the possibility of renewed negotiations. The situation remains more of a controlled disruption than a full closure of the route.

The ceasefire, which is due to expire soon, appears increasingly fragile. Iran is signaling limited confidence in upcoming talks, and some reports suggest it may not participate. At the same time, US negotiators are expected to arrive in Islamabad. Markets still assume that both sides ultimately seek an agreement despite rising tensions.

The US Navy seized an Iranian-flagged cargo vessel in the Gulf of Oman after it failed to respond to warnings. Iran described the action as “armed piracy” and threatened retaliation.

There are also reports of drone attacks on US targets, marking a clear escalation in direct confrontation.

Despite the narrative of closure, traffic through the strait has not been fully halted. More than 20 vessels transited on Saturday — the highest number since early March.

Trump reiterated over the weekend that he believes a deal with Iran “will be reached,” contrasting with rising tensions on the ground.

The US dollar strengthened at the open, alongside rising oil prices and worsening risk-off sentiment. Emerging market currencies weakened.

Despite geopolitical tensions, Asian equity markets remained relatively stable. The start of the new week did not bring a strong sell-off, with the market showing only a mild correction.

The People’s Bank of China kept LPR rates unchanged for the eleventh consecutive month. The one-year rate remains at 3.0%, and the five-year rate at 3.5%.

The UAE is considering trading oil in yuan if access to the US dollar deteriorates.