Oil’s supposed curtain call may be premature. A temporary US-Iran ceasefire reopened the Strait of Hormuz and sent crude tumbling over 17%, its steepest drop since early 2020. Stocks rallied on the relief, but the celebration risks getting ahead of a situation that remains fragile.

• The ceasefire is shaky as West Texas Intermediate remains about 40% above pre-war levels, while Polymarket odds of normal Hormuz traffic by the end of April have fallen to 41% from 65%.
• Citrini Research’s on-the-ground check near Oman shows tanker flow recovering to ~15 ships per day — still below normal, with many vessels operating off tracking systems.

Barrel of misses: Even before the ceasefire bounce, investors had already pulled back sharply from energy. ETFs have seen steady outflows since 2021, and the sector now makes up under 4% of the S&P 500. That positioning is harder to justify in an inflation-heavy environment where the sector has beaten rising prices 74% of the time since 1973 and delivered about 12.9% in average real returns. As Pickering Energy Partners’ Dan Pickering puts it, “The more visible energy gets, the riskier an underweight position gets.”