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The Common Sense understands that the deal being worked through would see Hormuz reopened and Iran receive sanctions relief and the release of frozen assets in exchange for climbdowns on its nuclear programme.

Late last week, Donald Trump sought edits to the language and content of the memorandum, especially to sharpen expectations around nuclear weapons commitments and the terms under which Hormuz would be reopened.

Advisory firm Frans Cronje Private Clients wrote in a note late last week, “The detail will be fraught, and occasional flareups should be expected. But the trajectory remains clear enough. The more likely outcome is still a nearer-term exit point rather than a drawn-out crisis.”

The Common Sense has reported that if the deal proceeds as expected, energy prices should fall while the global economy, markets, and currencies hold up well through 2026. This newspaper’s estimates are for Brent to trade between $65 and $73 by year-end, implying a South African inland petrol price of roughly R20 to R23.

That matters directly for South African households and firms. Lower oil prices would reduce pressure on fuel prices, transport costs, food distribution, input costs, and inflation expectations. They would also give consumers and businesses some relief after months of pressure from energy and interest rate shocks.

But the oil price outlook remains two-sided.

There is a credible counter-view that prices may rise sharply over the next two months. On that reading, the price over the past weekend at near $90 was being driven more by sentiment than by actual supply fundamentals. Chevron CEO Mike Wirth has warned that the shock absorbers of global supply constraints, chiefly inventories in storage, are being exhausted and that prices must rise as a consequence.

That warning is supported by estimates that Chinese imports have remained low over recent months and will have to rise again to shore up reserves. Gulf suppliers have also warned that it may take months for Hormuz flows to normalise even after the strait is opened.

The counter to those warnings is in turn that the very fear of a deeper oil shock will be likely to drive a faster settlement on the American side – while China is averse to shoring up commodity inventories when prices are high and will therefore have an incentive to do so slowly in order to avoid triggering a price spike. In that environment, sentiment may trump the fundamentals that Wirth warns of.