The Strait of Hormuz has now been effectively closed to commercial shipping for 207 days, since February 28. Commercial transit through the waterway that once carried roughly a fifth of the world oil trade sits at close to one percent of its pre-crisis level, based on the most recent published IMF PortWatch count of a single vessel transiting on September 20 against a typical 85. WTI crude, meanwhile, closed Thursday at 93.98 US dollars, up 1.97 percent on the day but still more than 10 dollars below the 102.48 peak it reached just two weeks earlier.
The Chain: A Closed Strait, a Cooling Price
The mechanism connecting a closed shipping lane to a Canadian portfolio runs through global crude supply. When roughly a fifth of the world seaborne oil trade cannot move through its normal route, the expected result is a sustained price premium, and that premium is what drove WTI above 100 dollars for much of September. What is unusual this week is the direction: oil fell more than 10 percent from its September 10 peak even as the Strait remained closed and fresh attacks continued, including a cargo vessel struck by a projectile on September 23 according to UKMTO, and a 94 kilometre oil slick detected off Musandam on September 22 that models suggest could partly reach shore this weekend.
The explanation is not that the disruption eased. It is that traders have partly priced in an assumption of continued workaround capacity, the reduced but real flow moving through the temporary Iran-Oman shipping corridor established earlier in the crisis, alongside reported diplomatic progress in New York talks.
The shaded region marks the four sessions after September 21, during which fresh attacks in the Strait were reported even as the price continued to ease from its September 10 peak.
Base Case Versus Tail Risk
The base case HDQ has tracked through the crisis holds: continued elevated but range-bound crude in the low to mid 90s, reflecting a market that has adapted logistics around the closure rather than absorbing a full supply shock. The tail risk is a confirmed, sustained drop in actual barrel flow, not just transit counts, showing up in inventory data. Independent tracking data and the figures cited by the Trump administration continue to diverge sharply, with US officials citing 10 to 40 vessels transiting daily against independent counts in the single digits. That gap itself is a source of mispricing risk: if the lower independent figures prove closer to the truth, the market has further room to reprice higher than this week suggests.
The Canadian Read-Through
Canadian energy names have lagged the disruption rather than tracked it closely this month, a divergence the Market Desk covers in detail today. For a Canadian portfolio, the practical implication is that WTI in the low to mid 90s is now the working assumption for energy sector earnings and for the Bank of Canada own inflation forecasting, not a peak that will mean revert lower once the conflict resolves. Any confirmed escalation, most plausibly a verified reduction in the Iran-Oman workaround flow, would move the price faster than positioning currently reflects.