Prediction markets have priced out any near-term resolution, with a US-Iran deal now seen as a May or June event at the earliest.
Polymarket, the prediction market platform, is pricing just a 31% chance of a permanent US-Iran peace deal by the end of May, rising to 48% by the end of June, signalling that traders expect Persian Gulf oil disruption to persist for weeks and potentially months yet.
With no credible prospect of a near-term breakthrough, particularly after Donald Trump pulled peace envoys from negotiations, the market is effectively telling oil traders to brace for a prolonged supply shock.
Brent crude has already risen 2.3% to almost $108 a barrel, and Goldman Sachs has raised its fourth-quarter Brent forecast to $90 a barrel from $80, citing the loss of an estimated 14.5 million barrels a day of Persian Gulf production and record drawdowns of global oil inventories.
The longer the disruption runs into May and June, the more stubbornly elevated energy prices will feed into global inflation, complicating the task facing central banks attempting to bring price growth under control.
Goldman sets out the stakes clearly: in a severely adverse scenario, with Gulf exports failing to normalise until end-July and capacity suffering lasting damage, Brent could average nearly $120 in the fourth quarter.
Even its base case, assuming Gulf exports recover by end-June, leaves Brent at $90, a level that offers little comfort to policymakers or consumers facing another summer of high energy costs.