Oil’s biggest trade is no trade as Hormuz fees leave investors frozen

The oil market finds itself in a terrible Catch-22 for the oil speculators; there is too much news and yet nowhere to go, especially the Strait of Hormuz that is controlled by one individual who definitely has too much power.

In any case, since Brent is the most reactive international benchmark regarding Middle East oil issues, it increased by 2.5% to reach $98.47 a barrel, following the threat of response from Iran’s IRGC concerning U.S. air strikes.

Subsequently, Brent increased by 4.1%, rising up to $100.11. WTI crude was last quoted at $93.91, a decline of 2.8% from the Friday price. However, this is an improvement when compared with the Monday figures. Oil prices dropped drastically on Monday due to the belief that a peace deal could be reached soon.

Iran is demanding payments for passing through Hormuz as traders shy away from oil trades

Cryptopolitan had earlier reported that Iran may want a permanent charge on ships using the Strait of Hormuz as part of any peace deal with the U.S. The idea would then put Iran and Oman in charge of the route and add what is being called an environmental fee or transit toll.

The pressure was mounting even before there were any mentions of the fees discussion. The U.S. Central Command referred to new attacks on Iran as defensive strikes on Tuesday.

On the other hand, Trump mentioned on the weekend that a deal seemed imminent after three months of warfare. The traders were seeing both news about the war and hope for peace at once. That is where you get blinking screens and no one wanting to look like a chump.

Dave Ernsberger, president of S&P Global Energy, said the mixed signals have left traders frozen. “People are afraid to take a position with so much mixed messaging going on about the status of negotiations,” Dave told CNBC. Dave also said:

“It’s an interesting question… as to whether the global markets, market participants, governments are going to be willing to allow for any kind of transit fee or toll in the first place. It’s the principle of freedom of maritime flow that’s really at stake here, and what kind of precedent it sets.”

Tankers stay scarce while Micron and Hyperliquid trades explode

Even if the Strait reopens under a deal, the oil flow is not snapping back like a light switch. Dave said:

“The reality is that very few crude tankers or product tankers get through at all. If it’s 10 vessels a day, you’d be lucky to see two of those being oil tankers.”

According to Dave, it could take about two months for the production of oil from Qatar, Iraq, and Saudi Arabia to be normalized. The shipping will take four quarters before going back to normal levels.

Away from crude, crypto traders had their own circus. Micron ($MU) crossed $1 trillion in market value Tuesday after its stock ripped higher. A Hyperliquid ($HYPE) trader was sitting on more than $6.2 million in floating profit from a leveraged Micron position built in just 20 days.

Wallet 0x577…95fd2 took a 3x long position on 22,188.647 MU contracts from May 6 until May 8 with an average cost of $575.25. With Micron (MU) soaring above $879 during intraday trading hours (+17%), that position is now worth at over $18.8 million.

On Stocktwits, Micron ($MU) is currently the top trending ticker, as retail sentiment stays bullish, while chatter cooled from high to normal over the past day.

Hyperliquid ($HYPE) also hit a new all-time high above $63, up more than 0.1% in 24 hours, and sentiment around HYPE is also extremely bullish, and social sentiment is extremely high. The token is up more than 144% this year, per data from CoinGecko.

On May 22, before the three-day market closure, President Trump said, “Micron is great,” and said the company could invest “over $100 billion” in New York.

When markets reopened Tuesday, Micron ($MU) jumped 19% and added about $150 billion in market cap in one day. Its value has gone from $70 billion to $1 trillion in 12 months, a gain of about $930 billion.