On April 17, Foreign Minister Araghchi stood before cameras and declared Hormuz “open.” Brent fell 11% in three hours. Twenty days later, commercial transits had reached zero.

The market priced the statement. Not the act.

Today is Day 94 of the closure. Brent trades at $91. An MoU sits unsigned on a table in Doha. The market is making the same trade it made in April, at a larger scale, against harder physics.

Whether the deal gets done is the wrong question. What matters is what happens to the physical world after it does, and why the gap between “deal signed” and “oil flowing” is wider than $91/bbl implies.

What the Market Is Pricing

Brent at $91 encodes a specific set of assumptions. The energy strategist’s read: the market assigns ~70% probability that the MoU signs within 30 days, ~65% probability that mine clearance follows within 45 days, and normalization at 75-90 days. That is the market’s base case. It is also where the mispricing lives.

The industry standard for post-signing normalization of a major strait closure is 4-6 months. The market is pricing 2.5-3. The 1.5-month gap is worth ~$10-13/bbl.

Probability-weighted fair value, running three scenarios against current physical conditions, is ~$101/bbl.

Scenario A (MoU signed, fast normalization): 20% probability, Brent $82-88. Requires coordinated mine clearance, immediate sanctions waivers, and insurance markets moving within weeks. None of the preconditions for this exist yet.

Scenario B (MoU signed, slow normalization - base case): 50% probability, Brent $94-104. The deal gets done, but the physical stack takes 4-6 months to clear. Vessels queue, compliance stacks delay US-nexus shipping, port repairs stretch timelines. The market catches up to physical reality around Month 2-3.

Scenario C (talks collapse): 30% probability, Brent $118-135. Guardian Council approves the NPT bill unconditionally, or a miscalculation produces US fatalities, or Israel removes the diplomatic track entirely.

The April 17 episode is the calibration point. When Araghchi spoke, the market moved before a single mine was cleared, a single OFAC waiver issued, or a single vessel transited. The statement was the catalyst. The physics was irrelevant for 72 hours. Then reality reasserted.

Watch Lloyd’s war-risk premiums as the honest signal. Below 0.8% means the insurance market believes normalization is real. Above 1.5% means the capital behind the statement disagrees. As of Day 94, premiums remain in the upper band.

The Mine Problem

Hormuz is 33 nautical miles at its narrowest. The usable traffic separation scheme: two 2-nautical-mile corridors. Fifteen to twenty mines in those corridors shuts commercial traffic indefinitely, regardless of what any communique says.

The US has three Littoral Combat Ships assigned to mine countermeasure operations in the Gulf. Their sensor suite (AN/AQS-20A sonar, ALMDS, Mk 18 Mod 2 UUVs) achieves ~30% detection reliability under best conditions. Northern Gulf conditions are not best conditions. Turbid water reduces acoustic performance. Heat shimmer degrades optical systems. Iranian acquisition of influence mines (pressure, magnetic, acoustic) in the preceding years means the detection problem is harder than it was in 1991.

The historical benchmarks are not encouraging. Kuwait Channel clearance after the Gulf War: 12 months, with coalition assets and Iraqi mine charts. Red Sea clearance in 1984: 12-18 months, again with charts and international cooperation.

Without Iranian cooperation, without mine coordinates, without a joint clearance mechanism built into the MoU, the realistic MCM timeline is 6-12 months. The Doha MoU as described contains a provision on mines. That provision is meaningless until the document is signed, and operative only if Iran provides the coordinates, which is a separate negotiation that does not automatically follow signature.

The market’s 45-day assumption for mine clearance is not conservative. It is not even a rounding error. It assumes a level of Iranian cooperation that has no precedent in this crisis.

The Insurance Gate

Most coverage of Hormuz normalization focuses on political announcements and OFAC action. The insurance market is the functional gate that receives almost no attention, and it will move last.

Lloyd’s Joint War Committee controls the Listed Areas designation. Hormuz entered the JWC Listed Areas list when the closure began. Getting off that list requires a committee vote. The JWC meets quarterly. The next likely session is July 2026.

Even a vote to delist Hormuz does not immediately restore normal insurance conditions. Underwriters then need: verified mine clearance from independent sources, 30 or more days of incident-free transits, the formal JWC delisting, and internal modeling sign-off before they reprice hull war-risk. The current rate range is 1.5-5% of vessel value per transit. Pre-crisis rates were in the 0.05-0.1% range.

A vessel operator cannot send a VLCC through Hormuz at 5% war-risk. The economics do not work. A $100M vessel at 5% war-risk costs $5M per transit just in insurance. Freight rates would need to absorb that premium, which cascades into cargo economics for the buyers at the other end.

The JWC gate alone adds 8-12 weeks to any normalization timeline after mine clearance is certified, independent of what OFAC does or what the Doha text says. The market is not pricing this bottleneck.

Day 1 After the Deal

Assume the MoU signs tomorrow. Here is what the first eight weeks actually look like, category by category.

The blockade ends by executive order within 1-2 days. That is the easy part. US forces stand down from interdiction posture. Iranian authorities announce passage is permitted. Non-US-nexus shipping, flagged in jurisdictions outside OFAC reach, starts lining up.

The backlog is 840+ vessels trying to transit simultaneously against a corridor with normal capacity of ~138 transits per day. Day 1 throughput will be 50-70 vessels. Week 2-3: 80-100. End of Month 1: ~120. Month 2: normal flow rate. The queue itself clears in 10-14 days. Port congestion inside the Gulf, for vessels that have been waiting at anchorage with cargo aboard, persists 6-8 weeks.

Kuwaiti crude loading from Mina Al-Ahmadi resumes when the terminal does. It sustained three strikes. Repair timeline: 3-6 months. Salalah lost a crane to an attack; crane delivery alone runs 12+ weeks. BAPCO in Bahrain has been under force majeure since March 9. These are not political problems. They are physical ones.

US-nexus shipping faces a different sequence entirely. On Day 1, US-flagged vessels, US-owned vessels, and vessels with US-nexus cargo cannot legally transit without an OFAC license or waiver. An OFAC waiver operationalizes in 2-5 business days and authorizes specific transactions. It does not restore correspondent banking, re-enable SWIFT access for Iranian counterparties, or remove entities from the SDN list.

P&I clearance (protection and indemnity, which covers crew liability) follows after the club reviews OFAC policy changes. That takes 2-4 weeks. Reinsurance clearance requires OFAC opinion letters; another layer. Flag state authorization is separate. War-risk insurance assessment is separate.

The timeline for US-nexus shipping resuming, even in limited form, is Week 4-8 post-signing. The market often conflates “blockade lifted” with “US ships transiting.” They are not the same event.

The Toll Booth That Won’t Go Away

Iran’s parliament is considering legislation that would impose a transit fee on vessels using the strait, administered through an IRGC-linked collection mechanism. If that bill passes into Iranian domestic law before or alongside the MoU, it creates a structural compliance trap with no clean exit.

Vessels transiting Hormuz would be required under Iranian law to pay the toll. Paying the toll routes money to IRGC-linked entities. The IRGC is a Specially Designated Global Terrorist under US law. Paying them is a sanctions violation under IEEPA and the IRGC designation authority. No OFAC general license covers IRGC transactions.

There is no compliant path for US-nexus shipping to pay the toll and no non-sanctioned path to refuse it and still transit. The only resolutions: either the IRGC is delisted (requires Congressional action, 12-18 months minimum assuming political will exists) or Iran repeals the toll law as part of a final agreement.

Even if the toll legislation dies in committee, the vetting apparatus the IRGC built to selectively enforce the blockade does not dissolve on announcement day. The institutional capacity to identify US-linked tonnage, slow-roll clearances, and impose informal delays was constructed over 94 days. Dismantling it requires a political decision inside the IRGC, not a statement from the Foreign Ministry.

Expect 2-4 week delays on US-linked tonnage to persist for months after nominal reopening, even in a clean-deal scenario.

Three Paths from Here

Path A: Signed within 30 days (28% probability)

Triggers: Doha bridging language replaces “cessation” of enrichment with “suspension,” giving both sides room on the nuclear file. Guardian Council delays or tables the NPT bill. Trump accepts a symbolic Iranian asset gesture framed as a domestic win. A third-party guarantor (Qatar or Oman) provides verification architecture.

The risk is Trump’s public framing. If the deal is presented as a US victory over Iran’s nuclear program, hardliners in Tehran have the ammunition to kill it domestically. Araghchi’s negotiating position depends on the Guardian Council not viewing the deal as capitulation. Public US triumphalism is a deal-killer.

Brent in this scenario: initial “deal euphoria” dip to $84-86, then reassertion to $94-100 within 30-45 days as mine clearance delays become undeniable to the market.

Path B: Frozen stalemate, 60+ days (48% probability)

The talks continue without resolution. Neither side walks away. The MoU stays on the table, unsigned. This is not a stable equilibrium. Every week in stalemate moves probability mass from Path B toward Path C. The market prices stalemate as ambiguity; the physical world treats it as closure.

Brent in this scenario: $85-93, with downside variance compressing as the market fully prices the extended closure.

Path C: Collapse (24% probability)

Triggers: Guardian Council approves the NPT bill unconditionally. Trump issues a public deadline Iran cannot meet without domestic political collapse. An Iranian action produces US military fatalities, removing the diplomatic track. An Israeli strike removes it entirely.

This is not the base case. At 24%, it is also not a tail risk. Brent in this scenario: $115-140+, with supply-side shock compressing the OPEC spare capacity buffer that has partially cushioned the crisis to date.

Leading indicators to monitor:

The language in any Doha communique is the first signal. Watch specifically whether Iranian language on enrichment shifts from “cessation” to “suspension.” Those are not synonyms; they encode the distance between the positions.

Guardian Council session dates on the NPT bill are the second. A scheduled vote with no delay motion signals Path C is gaining weight. A delay motion signals Path A or B remains viable.

IRGC toll enforcement activity is the most reliable real-time signal of Iranian operational intent. If the vetting apparatus visibly stands down, the political decision to normalize has been made at the level that matters. If enforcement continues, no statement from the Foreign Ministry changes the physical reality on the water.

What to Watch

Structural changes to global energy flow are locked in regardless of how the Doha talks resolve. Saudi Arabia’s Yanbu bypass capacity expansion is underway; it was accelerated by the crisis and will not be reversed. Russia-to-Asia flow consolidation has reduced dependence on Hormuz-routed crude for a significant portion of Asian buyers. SPR refill bids are visible in the forward curve. Cape route economics for VLCCs have been permanently reassessed.

These are not crisis-era anomalies. They are durable redirections of physical infrastructure and capital that will persist for years.

The insurance market is the scoreboard. Lloyd’s JWC war-risk premium is the one number that reflects what sophisticated capital with exposure actually believes about physical safety, legal clarity, and operational reality at Hormuz. It aggregates the mine problem, the compliance stack, the port damage, and the political risk into a single price.

When that premium crosses below 0.8%, the market’s normalization thesis is being confirmed by the people writing the checks. Until it does, $91/bbl is the April 17 trade, run again at scale.

The MoU is not the event. Mine clearance certification is not the event. The JWC vote is not the event. The event is the first VLCC with a US-nexus operator that transits Hormuz under normal war-risk cover, with a cleared P&I certificate, carrying cargo with no sanctions encumbrance, and arrives at its destination without incident.

That event is months away, at minimum. Price accordingly.