Two separate clocks run out today in the Strait of Hormuz. The interim ceasefire that has structured the region since June 17 formally expires, and so does the 60-day toll suspension Iran agreed to under that same memorandum. Iran's negotiators have said the underlying toll framework does not return to how it was before the war. The Persian Gulf Strait Authority has explicitly reserved the right to resume charging fees once the waiver ends. Neither side has offered a resolution before the deadline arrived.
The Mechanism That Actually Moves Oil
The Persian Gulf Strait Authority remains a Specially Designated National under US Treasury sanctions, a status assigned on May 27 that has not changed and will not change today. That means a Western-linked shipper cannot legally pay a resumed Iranian toll regardless of what happens to the waiver, which means today's expiry does not actually reopen a legitimate path that was closed. It removes the one mechanism, the MoU-linked suspension, that had given the appearance of an orderly process on top of an arrangement most compliant shippers could never use in the first place.
What has kept oil moving through the strait instead is evasion. A tanker identified as AXON I broadcast a false Angola flag, switched off its transponder for a week at anchor, took on cargo from a fellow sanctioned vessel off Oman, and changed its declared destination twice before departing laden for the Gulf of Oman. Independent tanker trackers assessed it as the first confirmed sanctions-evasion voyage completed since the US naval blockade was reimposed on July 13. US officials estimate as much as nine million barrels a day are still transiting the strait despite the disruption, much of it through exactly this kind of workaround rather than through any mechanism today's expiry could have preserved.
Brent has spent the past month inside a wide but bounded range as this pattern has played out underneath the headlines, a shape that reflects a market pricing continued disruption rather than either resolution or collapse.
Brent has traded between $79.36 and $94.26 over the past month without a sustained break in either direction, consistent with the EIA's own forecast for continued but bounded disruption through the third quarter.
Base Case Versus Tail Risk
The base case is continuation, not escalation. The US Energy Information Administration forecasts Brent averaging around $85 a barrel in the third quarter of 2026 and expects most Middle East production to return toward pre-conflict levels only in early 2027, with roughly 0.6 million barrels a day of disruption persisting through the end of that year regardless of how today's deadlines resolve. That forecast already assumes an unresolved strait, which is exactly what today produces.
The tail risk is a widening of the conflict beyond the tanker war that has defined its economic footprint so far. Israel's weekend strikes on Lebanon killed a senior Hezbollah commander, opening a front distinct from the Iran-direct confrontation that has driven oil prices until now, and Washington is preparing new economic sanctions aimed at forcing Iran's capitulation. Neither development alone would move oil beyond the range the market has traded inside this summer. Both landing in the same week that the ceasefire and toll waiver expire is the combination the desk is flagging as a genuine, not incremental, change in probability.
What This Means for Canadian Portfolios
The base case supports the re-rating already visible across Canadian energy and materials names and in gold's continued role as a hedge, without requiring a fresh headline to sustain it, since the EIA's own numbers already assume the disruption continues into 2027. The tail risk is the scenario that would move Canadian portfolios beyond that already-priced range, and it is not new information so much as a set of known possibilities that have not, until today, arrived at the same moment as the expiry of the one framework that had structured expectations since June.