The oil market is pretty complacent. The blockade is the best card the US has against Iran. If they can sustain it for another two months, Iran's oil revenues will drop to zero. Trump's gamble is that this will bring Iran back to the negotiating table. If it doesn't happen, we could go a lot higher on oil prices.

The market has been coping well after the initial shock. If the blockade holds but the ceasefire also holds without attacks on Iran or regional countries, the rise in prices will remain contained. China has oil in storage, and IEA countries can release strategic reserves.

If the strait remains closed for another two months, we could be heading back to previous highs around $120-125 for Brent. Once we reach $125-130, you start seeing strong demand destruction, so it's hard to see prices going much higher than that.

The UAE's exit from OPEC is the hardest blow in its history. This is the third largest member in terms of production leaving. It's a major blow to Saudi leadership. The UAE has production capacity close to 5 million bpd but was constrained to 3.4-3.5 million bpd under OPEC quotas. When the strait reopens, it could mean 1-1.4 million bpd of additional crude reaching markets, roughly 1.5% of global supply.

It's also a reflection of the growing geopolitical rift between UAE and Saudi leadership, with different stances on conflicts like Yemen, Libya, Sudan, and the Abraham Accords.