Citadel Securities warns financial markets are underestimating the probability of a US-Iran deal that would reopen the Strait of Hormuz, potentially triggering a broad relief rally. Strategist Frank Flight identified two key indicators suggesting significant progress toward an agreement that would restore shipping through the vital oil passage.

The market implications extend far beyond oil prices, with Flight suggesting the Strait of Hormuz reopening could create widespread positive effects across multiple asset classes. The narrow passage handles about 20% of global oil consumption, making its operational status a critical factor for energy markets worldwide.

Investors should prepare for potential volatility as diplomatic developments between Washington and Tehran continue. Flight's analysis suggests markets have not fully priced in the likelihood of this geopolitical risk subsiding, creating opportunities for those positioned to capitalize on improved regional stability.