Strait of Hormuz: Open waterway or controlled passage? Oil and aluminium markets await clarity

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Has the Strait of Hormuz really reopened? The answer depends on whom you ask. Following the preliminary agreement between Washington and Tehran on June 17, markets initially welcomed the prospect of the Strait of Hormuz returning to normal operations and global energy supplies flowing without disruption. The easing of immediate geopolitical tensions prompted traders to unwind much of the risk premium that had accumulated during the conflict, triggering a sharp correction across oil and aluminium markets.

Global benchmark Brent crude fell to around USD 77.76 per barrel on June 17, 2026, its lowest level in more than three-and-a-half months. Aluminium markets followed a similar trajectory, with prices retreating by approximately 10-12 per cent from the four-year highs above USD 3,850 per tonne reached earlier in the month.

That optimism, however, proved short-lived. Iran subsequently pointed to continued Israeli military operations in Lebanon and what it described as breaches of the ceasefire arrangement by the United States, raising fresh questions over the status of the world's most strategically important maritime corridor.

As a result, two competing narratives have emerged. Tehran maintains that the Strait remains effectively closed and subject to Iranian oversight, while Washington insists the waterway is open and commercial navigation continues uninterrupted.

The uncertainty is reflected in commodity markets. By June 23, Brent crude futures had recovered modestly, rising 24 cents, or 0.38 per cent, to USD 78.15 per barrel, while US West Texas Intermediate (WTI) gained 33 cents, or 0.46 per cent, to USD 74.19 per barrel. Aluminium prices have also found a degree of stability, with London Metal Exchange (LME) spot prices consolidating in the USD 3,320-3,400 per tonne range.

For the aluminium industry, oil remains a critical factor across regions with large concentrations of alumina refining capacity. China consumes an estimated 32,455 TJ of energy in metallurgical alumina production, while South America accounts for approximately 34,296 TJ. The rest of Asia and Africa together consume a further 18,639 TJ.

Any prolonged disruption to oil flow through Hormuz would therefore translate into higher refining costs, lower metal production margins and a tightened competitiveness for the aluminium supply chain across multiple regions.