Ceasefire Expires Tomorrow: What Happens If the Iran War Restarts

The two-week ceasefire agreed April 8 between the United States and Iran expires Wednesday, April 22. As of Tuesday morning, the diplomatic picture is deteriorating rather than stabilizing. Iran’s Foreign Ministry has described the U.S. naval blockade of Iranian ports as a ceasefire violation and stated that “no clear prospect for productive negotiations is foreseen” under current conditions. Tehran’s parliamentary speaker warned Monday that Iran has been preparing “new cards on the battlefield.” Trump, in a Bloomberg interview Monday, said he is unlikely to extend the ceasefire and will not open the Strait of Hormuz until a deal is signed. The American delegation is described as prepared to travel to Islamabad. No Iranian delegation has confirmed departure.

What the Strait Actually Looks Like Right Now

The April 17 declaration by Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz was “completely open” created a sharp market reaction but minimal commercial traffic. MarineTraffic data showed approximately two dozen vessels beginning transit before most turned back into the Persian Gulf. Kpler, the commodity analytics firm, estimates that 862 vessels are currently operating inside the Mideast Gulf, including 187 laden tankers carrying roughly 172 million barrels of crude and refined products, along with 15 LNG vessels that remain nearly entirely stalled. That cargo backlog represents approximately $17 billion in stranded energy and dry bulk shipments.

Iran’s parliament is simultaneously moving to formalize the blockade through legislation that would permanently bar ships from countries designated as hostile and require tolls from all others. If passed, this would transform what has been a military-tactical closure into a codified legal framework — a structural escalation that would survive any temporary ceasefire and complicate any future peace agreement’s shipping provisions considerably.

The Two Scenarios and Their Portfolio Implications

The next 36 hours present a genuine binary for global markets. The outcomes and their implications are distinct enough that advisors should be thinking about them as separate scenarios rather than a single uncertain outcome.

In the resolution scenario, the U.S. and Iran agree to a memorandum of understanding or a ceasefire extension, Pakistani mediators have suggested a 60-day framework is possible. Oil would sell off sharply, potentially returning toward $80 to $85 Brent as the Hormuz backlog begins moving. Canadian energy producers, which have benefited from elevated crude, would see revenue compression. The broader TSX and global equity markets would likely rally on reduced inflation risk and improved consumer outlook. The Bank of Canada would have more room to consider easing later in 2026. For balanced Canadian portfolios, this scenario is net positive.

In the resumed conflict scenario, Trump follows through on his threat to resume military operations against Iranian energy and power infrastructure. This is a categorically different kind of target from the February 28 strikes on military and government facilities. Attacks on Iranian oil processing, pipelines, or power generation would directly constrain Iranian export capacity, remove roughly 3 million barrels per day from the market, and potentially trigger Iranian retaliation through Hormuz mining or regional proxy action. Rystad Energy has already warned that oil at $100 per barrel could unlock 2.1 million barrels per day of new South American supply, but that supply takes months to bring online. The immediate price effect of infrastructure targeting would be upward, likely sharply. Morgan Stanley’s scenario analysis places oil at $100 to $110 per barrel in the high-friction case, with meaningful downward revisions to global GDP growth and upward revisions to inflation.

The Canadian Angle

Canada’s position in this binary is structurally mixed, as it has been since the conflict began. Higher oil benefits Canadian energy producers and Alberta’s fiscal position. It complicates the BoC’s rate path, squeezes consumers, and weighs on the broader non-energy economy. The IMF has already forecast Canada will underperform other G7 nations on growth in 2026. A resumed conflict that keeps oil elevated through the summer would reinforce that underperformance while also constraining the federal government’s ability to deliver the fiscal measures it announced alongside the fuel excise suspension. The war premium on oil is not a net positive for Canada. It redistributes within Canada — from consumers and non-energy businesses toward energy producers and royalty-dependent governments — while reducing overall economic efficiency.