India, June 25 -- If the US-Iran deal were to hold and hostilities were to cease and maritime traffic flow through the Strait of Hormuz normalised permanently, the world would be spared the prolonged pain of what was described as the greatest energy shock in capitalism's history. To be sure, a complete status quo ante, as far as supplies of oil and other distillates from West Asia is concerned, will take time, given the war-time damage to production facilities.

This is good news regarding first principles. But commodity markets operate in a world which is more complicated than just first principles. Prices often respond to ultra-short-term or long-term considerations. The latter played a role in keeping oil prices from hitting stratosphe...