A ceasefire will not prevent the Iran war’s economic harm

If the ceasefire fails the rally would be reversed and then some, because investors would have to price in a war that is resistant to peacemaking. If it holds, recession will be avoided, but commodities markets will still feel the effects of the war for months to come. Gulf countries have cut their output of crude by 10m barrels per day, or 10% of global supply. It will take time to restart infrastructure and get it going full pelt, and to move tankers to the right places. Insuring cargoes could be pricey, and Iran may try to impose new tolls, creating uncertainty even if it fails. There is likely to be a lasting risk premium in oil prices, reflecting the chance of renewed fighting.