Markets opened Friday in cautious mode as Vice President JD Vance boarded Air Force Two bound for Islamabad, Pakistan, where U.S. and Iranian delegations are scheduled to meet Saturday in a high-stakes bid to salvage — and ultimately extend — the fragile two-week ceasefire announced by President Donald Trump on Tuesday evening. "We're looking forward to the negotiation," Vance told reporters before departing, while adding a pointed warning that Washington would not be "played" at the negotiating table.
The ceasefire, which came just hours before Trump's threatened deadline to bomb Iranian infrastructure, is already showing signs of strain. Iran's parliamentary speaker Mohammad Bagher Ghalibaf accused the United States of violating three of Tehran's ten stated conditions for maintaining the truce, citing Israel's continued strikes in Lebanon, an alleged drone incursion into Iranian airspace, and Washington's refusal to acknowledge Iran's right to uranium enrichment. Separately, Iran-backed Hezbollah exchanged fresh strikes with Israeli forces overnight Friday, further clouding the diplomatic picture.
Of most immediate concern to energy markets: ship traffic through the Strait of Hormuz has not materially recovered since the ceasefire announcement. The Abu Dhabi National Oil Company CEO Sultan Al Jaber said bluntly on Thursday, "The Strait of Hormuz is not open. Access is being restricted, conditioned and controlled." Data from tanker-tracking firm Kpler confirmed that fewer than a dozen vessels had transited the waterway since Tuesday — well below the pre-war norm of roughly 20 tankers per day carrying approximately 20% of global oil supply.
Oil prices reflected the uncertainty. U.S. West Texas Intermediate crude hovered around $98 per barrel Friday morning, having staged a dramatic roundtrip from above $117 on the eve of the ceasefire announcement, plunging 16% on Wednesday in relief, and then partially recovering Thursday as the reality of a still-blocked strait set in. Brent crude traded around $97, still far above pre-war levels of approximately $70 per barrel in late February.
The broader U.S. equity market opened modestly higher Friday, with the S&P 500 rising 0.21%, the Nasdaq gaining 0.56%, and the Dow industrials little changed. The indexes are on pace for their best weekly advance in nearly a year, fueled by the initial ceasefire euphoria earlier in the week. The 10-year Treasury yield edged up to 4.30%, reflecting inflation concerns tied to elevated energy prices.
Analysts are divided on the weekend outlook. "While there are a number of ways for the uneasy truce to fall apart, and Iran remains belligerent in public, there is obviously a private desire to reach some sort of agreement," wrote TheStreet Pro contributor James DePorre. BCA Research warned that energy and commodity markets are likely to remain structurally elevated regardless of the ceasefire outcome, as governments stockpile reserves in anticipation of potential renewed conflict. With U.S. national gasoline prices averaging $4.17 per gallon and diesel near its historical highs, the pressure on the Fed — and on American consumers — is mounting with every day the strait stays closed.