A conflict once expected to last days or weeks is approaching six months,
raising the risk Iran may delay any deal until the end of President Trump’s term
in January 2029. Markets have largely abandoned a rapid resolution but have not
fully priced a scenario extending to Jan 2029. An adviser to Iran’s
parliamentary speaker said Trump would not reach a deal and Iran would
“accompany” him but not sign a real agreement before his term ends. If fighting
persists through Jan 2029, market, corporate and household expectations would
have more time to adjust; oil and refined-products forward curves would likely
reprice to reflect higher prices sustained for longer. Gulf exporters are
expected to accelerate alternative export routes, efforts to bypass or reduce
reliance on the Strait of Hormuz, or seek negotiated safe‑passage arrangements
with Iran in exchange for cash or gold; some alternative routes are reportedly
advanced. Iran may intensify pressure on energy and shipping, restricting crude
and refined-product outflows and disrupting tanker flows. A prolonged stalemate
could erode perceived US geopolitical credibility, prompting partners to seek
security and economic alternatives — a trend with prior economic precedents
after recent US trade actions. Broader geopolitical spillovers, including
increased risk involving Russia, may rise. The petro‑dollar recycling dynamic
could become less stable; while the dollar is likely to remain dominant,
oil‑dollar flows may increasingly diversify or shift toward alternative
arrangements.
