Analyst: The market is not betting on the Strait of Hormuz being closed long-term or on a third oil crisis.

Mars Finance reports that on April 17, Ryoji Musha, President of Musha Research in Japan, stated that the gap between media reports of pessimism and actual market behavior is too large to ignore. Since the outbreak of the Iran conflict on February 28, the S&P 500 index has recovered all its losses and returned to within 1% of its all-time high. Although the prices of recently settled crude oil futures remain high, the prices of contracts settled in six months have fallen back to the $70 range. Therefore, the market has not assumed that the Strait of Hormuz will be closed long-term, nor that a third oil crisis will occur. Additionally, Musha pointed out that the world’s dependence on crude oil is no longer as high as it was in the 1970s, and the share of oil in Japan’s energy structure has decreased from 76% during the first oil crisis to 35% in 2024. Now, alternative routes such as pipelines from countries like Saudi Arabia and the UAE already exist, and a long-term closure of the Strait of Hormuz would not align with Iran’s own interests, as this strait is also a lifeline for Iran’s trade. Japan remains vulnerable to another rise in energy import and transportation costs, but market trading patterns no longer resemble those of an imminent full-scale oil crisis. (Jin10)