April 8, 2026

Can a two-week ceasefire hold when insurance companies outrank presidents?

Oliver Hazzard Perry Class Frigate - from an 'Island AIr' De Havilland Canada Dash 8

Ninety minutes from catastrophe

Donald Trump announced a two-week ceasefire with Iran on April 7, roughly 90 minutes before his self-imposed deadline to launch what he had framed as a civilisation-ending escalation. Hours earlier, he had posted on Truth Social that “a whole civilization will die tonight, never to be brought back again” if Iran refused to comply.

Iran’s Foreign Minister Abbas Araghchi confirmed acceptance, stating that safe passage through the Strait of Hormuz would be possible for two weeks via coordination with Iran’s Armed Forces. Read that language carefully. Iran is not reopening the strait. It is offering supervised access, preserving its role as gatekeeper.

The intervention that pulled both sides back from the brink came from Pakistan’s Prime Minister Shehbaz Sharif, who appealed to Trump to extend his deadline by two weeks and urged Iran to open Hormuz as a goodwill gesture. Formal US-Iran negotiations are now scheduled to begin in Pakistan on Friday.

This was Trump’s seventh deadline. The previous six passed without follow-through. The pattern is now established.

Markets celebrated. They shouldn’t relax.

The relief rally was immediate and substantial. US crude futures fell 14.3% to $96.83 a barrel and Brent crude dropped 13.3% to $94.74. Earlier that day, US crude had briefly climbed above $117 before the ceasefire news broke. Asian equities surged, with Japan’s Nikkei 225 up 4.8% and South Korea’s Kospi gaining 5.6%.

But context matters. Oil was trading at around $70 a barrel before the war began on February 28. Even after the ceasefire plunge, crude remains roughly 35% above pre-war levels. Pepperstone’s Michael Brown noted that market participants were “desperate for anything resembling good news for some weeks now”. Desperation is not the same as resolution.

Stephen Innes of SPI Asset Management said the deal “matters enormously for Asia”, where several governments had already introduced emergency measures to combat rising energy costs.

Insurance companies hold the real key

Here is the fact that every relief rally ignores. The Strait of Hormuz is just over 30 kilometres across at its narrowest point and carries one-fifth of the world’s oil and liquefied natural gas. Iran brought maritime traffic to a near-total halt after the war began, triggering the steepest monthly oil price rise in history, more than 50% in March alone.

A ceasefire announcement does not reopen the waterway. As ABC Americas editor John Lyons explained: “Even if Trump declares the strait safe, it is these insurance companies that will ultimately decide which oil tankers pass”. Insurers need sustained proof of safety, not a social media post and a handshake. That process takes weeks, not days.

Meanwhile, Iran’s IRGC has reaffirmed that all shipping “to and from ports of allies and supporters of the Israeli-American enemies” remains prohibited. US intelligence sources confirm that only about one-third of Iran’s missile arsenal has been destroyed despite more than a month of intensive strikes. Iran can still fight.

New Zealand is already paying the price

The domestic transmission is real. New Zealand’s 3-year swap rate jumped from 3.19% to 3.93% in under a month since the war began, effectively pricing in three OCR increases. That means higher mortgage costs and a harder environment for every business carrying debt.

The expert split on the right response is genuine and unresolved. BNZ’s Jason Wong warned of “a prolonged war adding to inflation, pressure on fiscal accounts, and central banks needing to counter the impact with tighter policy”. Kiwibank’s chief economist Jarrod Kerr argued the opposite, saying the RBNZ should not hike given “the immense demand shock that the oil disruption brings to the Kiwi economy”. The ceasefire does not settle this debate. It just buys two weeks of lower pressure.

Foreign Minister Winston Peters called for de-escalation and described Iran’s Hormuz closure as a serious breach of UNCLOS, speaking on behalf of Pacific island nations as well as New Zealand.

What the next fortnight actually decides

The Pakistan-hosted negotiations beginning Friday will reveal whether this is a genuine diplomatic opening or a face-saving delay. Watch the oil price. A sustained move back toward $70-80 would signal real resolution. Prices holding above $90 mean the market does not believe the ceasefire holds.

Watch the IRGC. Any action against shipping during the two-week window is the clearest signal the deal is collapsing. And watch Israel. Netanyahu explicitly stated the ceasefire does not cover Hezbollah fighting in Lebanon. The broader regional conflict is not paused.

As CBS News national security analyst Aaron MacLean observed: “What a difference five weeks makes”. Trump moved from limited war aims to civilisational threats to a negotiated pause brokered by Pakistan. That trajectory does not inspire confidence that the next two weeks will produce anything durable.

Sources

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