Three changes you might see if Strait of Hormuz opens this week

[00:00:00]Mr. Speaker, late on Sunday night after months of mediation by Pakistan, Prime Minister Shahbaz Sharif announced a historic deal to end the war between the US and Iran. Just 10 minutes later, US President Donald Trump took to Truth Social declaring the deal is now complete. Let the oil flow. Oil prices are already plunging, but how does the reopening of the world's most critical energy choke point actually impact your daily life? Here are three things you could notice. First, food prices should start coming down. The closure of the strait since March heavily choked global fertilizer supply. A third of the raw materials needed [music] to make fertilizer passes through this narrow waterway along with 20% of the natural gas required to manufacture it. With the deal announced, grain futures are already dropping. [music] It's a massive relief for global markets, especially for Gulf countries that rely on the strait for the bulk of their food imports. [music] Second, your pharmacy bills could get cheaper. When the strait closed, a massive spike in petrol, diesel, and air freight costs sent manufacturing and shipping fees soaring. Supply of Gulf petroleum derivatives used to make everyday drugs like paracetamol and aspirin [music] was strangled driving UK over-the-counter medicine prices up by 30%. Reopening the strait should clear that bottleneck and bring down prices.

[00:01:21]And third, your summer holiday plans might be saved. Jet fuel prices skyrocketed when the war broke out, but airlines like easyJet had already hinted future ticket prices if fuel costs dropped significantly. Now the strait could be opening, this looks all the more likely. But don't expect a sudden refund. It could take up to 30 days for ships to safely clear mines and fully navigate the strait. [music] And damaged refining capacities across the Middle East mean a full market rebalance will take time. [music] The official signing ceremony is set for this Friday, June in Geneva. So, until the ink is dry, you might want to hold off on booking those flights.