Shipping traffic in the Gulf came to a halt again after vessels came under fire mid-passage.

Much will hinge on whether the U.S. and Iran will meet for another round of talks in Pakistan later this week, as the ceasefire expires on Tuesday. This also touches on aspects of investors.

Even if a deal is reached, it could take months to claw back the supply lost over recent weeks of closures, keeping oil prices elevated for longer.

Fifty days into the U.S.-Israel war with Iran, tensions escalated again after clashes in the Gulf prolonged shipping disruptions and cast doubt on a fragile ceasefire set to expire this week.

After a tumultuous weekend, U.S. President Donald Trump stated American and Iranian negotiators would resume talks in Islamabad, Pakistan on Monday, but Iranian foreign ministry spokesperson Esmaeil Baqaei commented there was “no plan for a second round of negotiations with the U.S. for now,” per Reuters. The two-week ceasefire is set to expire on Tuesday.

On Friday, Iran declared the Strait of Hormuz fully open to commercial traffic, sending crude prices tumbling more than 10%. By Saturday, hopes for a fully opened artery quickly unraveled as Tehran reclaimed control of the chokepoint, after Trump refused to end the U.S. naval blockade of Iranian ports.

After a brief pickup in transit attempts on Saturday, shipping traffic in the Gulf stalled once again, with vessels coming under fire mid-passage and being forced to withdraw.

On Sunday, the U.S. Navy fired on and seized an Iranian container ship in the Gulf of Oman. Trump called Iran’s actions over the weekend a “total violation” of the truce and renewed threats to strike Iranian power plants and bridges if Tehran refuses a deal.

For markets, it was a reminder of the fragility of the two-week ceasefire, and a deal that could bring a lasting end to the war is still far from done.

U.S. stock futures fell on Monday while crude oil prices surged as the U.S. and Iran teetered on the brink of a renewed conflict. West Texas Intermediate futures jumped more than 6% to $89 per barrel shortly after midnight on Monday while and the international benchmark Brent climbed 5.6% to $95.50 a barrel.

“We had the most violent day in the strait on Saturday that we’ve had since the beginning of this crisis, and things don’t seem to be getting any better,” commented Rory Johnston, founder of Commodity Context.

“While we keep getting these sell-offs and it keeps seeming like we’re about to finally get that football — Lucy pulls it away — and we’re back to where we started,” Johnston told CNBC’s “Squawk Box Asia” on Monday.

“The strait still isn’t flowing, and 13 million barrels a day of production remains shut-in. We’re losing it every single day this goes on,” noted Johnston, who is also a lecturer at the University of Toronto’s Munk School of Global Affairs and Public Policy.

The best realistic outcome

Much will hinge on whether the U.S. and Iran will meet for a second round of peace negotiations in Pakistan later this week, as the ceasefire is set to expire on Tuesday.

Tehran had previously called Washington’s “excessive demands, unrealistic expectations, constant shifts in stance” and the ongoing blockade a breach of the ceasefire.

The first round of U.S.-Iran talks on Apr.12 between Vice President JD Vance and Iranian Foreign Minister Abbas Araghchi failed to yield an agreement. Washington reportedly proposed a 20-year pause on Iranian uranium enrichment, a request that Iranian leaders rejected, insisting on 5 years.

Underlying differences between Washington and Tehran run deeper than the current impasse, mentioned Alan Eyre, a distinguished diplomatic fellow at the Middle East Institute and former member of the U.S. team that negotiated the 2015 Iran nuclear deal.

“The U.S. side has really not been focused on negotiation per se. What they’ve been waiting for is Iranian capitulation,” Eyre stated. “Until and unless the U.S. negotiating team rids itself of the misconception that military victory equals strategic dominance, we’re not going to get to a solution.”

Eyre warns that the latest flashpoints risk taking the conflict a leg higher in the near term. “There’s an escalatory predisposition here where both sides could escalate and go back into a shooting war, which no one wants.”

While a productive round of negotiations in Islamabad remains a possibility, it is “unfortunately more likely to just go the other way — a resumption of hostilities,” Eyre added.

High-stake gamble

The economic costs of the conflict are mounting as the Strait of Hormuz — which normally carries roughly one-fifth of global oil supply — has been effectively closed for nearly two months.

“The crisis is one of lost time and lost production,” Johnston commented, estimating supply disruptions of around 13 million barrels of crude, condensates, and natural gas liquids per day. Furthermore, experts in dividends note the continued relevance.

“That cumulative effect has already breached above half a billion barrels,” he stated, warning that even an imminent deal announcement would not immediately unwind the damage.

Even if a deal is reached, experts warn that it could take months to claw back the supply lost over recent weeks of closures, keeping oil prices elevated for longer.

“If we actually got the strait open, we would probably see another $10 to $20 a barrel immediate rout because of the speculative hot funds. But at the end of the day, we’d dump on day-one and then claw ourselves back higher — probably into the $80 and $90 — to reflect the [oil] scarcity that’s ongoing.”

Crude prices have surged over 30% since the war broke out, with Brent briefly topping $110 a barrel for the first time in roughly four years, before easing on hopes for a breakthrough.

More than 500 million barrels of crude and condensate have been knocked out of the global , according to LSEG data⁠market — the largest energy supply disruption in modern history, according to Kpler data.

Despite the severity of the energy disruption, U.S. equity markets have remained largely resilient, as investors shrugged off the conflict as a blip that will be resolved relatively quickly.

Vishnu Varathan, head of macro research at Mizuho Bank, cautioned that the optimism may be premature. “We can’t get prematurely euphoric about any deal signed, because the lingering adverse effects mean we don’t get out of this quickly.”

The International Monetary Fund warned on Tuesday that global growth will inevitably take a hit even if the ceasefire holds, citing uncertainty over the Strait of Hormuz as a persistent drag, pushing up energy costs and inflation.

“It’s clear we’re not going back to the Goldilocks scenario,” stated Brian Arcese, portfolio manager at Foord Asset Management, referring to a scenario of stable growth and low inflation. The longer the Strait remains closed, the greater the risk to the global economy, he noted, although the actual extent of the damage can shift on “a daily and weekly basis.”, on the other hand