MSCI Emerging Markets Index Rises 0.8% to Hit All-Time High
Alina Collins
After the interim U.S.–Iran deal took effect, the MSCI EM equity index briefly rose 0.8% to a record high — yet roughly 80 million barrels of crude still sit in the Persian Gulf waiting to transit the Strait of Hormuz, and whether the deal translates into actual shipments will determine how far this rally can run.
Stocks hit a record but currencies fell — what is the market pricing in?
The MSCI EM equity index briefly gained 0.8% to touch an all-time high, then pared gains to roughly flat.
At the same time, the EM currency index dropped 0.3% — equities and FX moved in opposite directions.
This means → capital is betting that lower oil prices boost corporate earnings, but confidence in EM currencies has not followed. Equities track profit expectations; FX tracks capital flows — the two are sending different signals.
80 million barrels stuck at the strait — how much has actually moved?
Vortexa data show 40 very large crude carriers (VLCCs — supertankers each carrying about 2 million barrels) fully loaded and waiting in the Persian Gulf, totaling close to 80 million barrels.
Of those, 21 are headed for Asia, 5 bound directly for China, and another 5 targeting transshipment hubs near Malaysia and Singapore.
As of early Friday, at least 3 VLCCs were sailing toward the strait at normal speed. On Thursday, roughly 10 million barrels — including cargoes on Saudi-owned VLCCs — had either cleared the strait or were in transit. Three Saudi supertankers reappeared in the Gulf of Oman.
In plain terms = tankers have started moving, but only a fraction of the 40 have gone so far — the main fleet is still waiting for the green light.
Is the strait actually safe?
BIMCO, an international shipping body, warned that significant safety risks remain in the strait despite the U.S.–Iran agreement.
Some vessels have switched off their transponders — automatic identification systems that broadcast a ship's position — while others report electronic interference with their signals.
This means → the deal is a political "go-ahead," but the physical risks shipowners face — jammed signals, unclear navigational conditions — have not been eliminated. Actual transit numbers may shift as information is updated.
Why is the Indonesian rupiah suddenly in the spotlight?
The rupiah fell 0.4% against the dollar — not because of oil, but because MSCI raised concerns about information-access channels in the Indonesian equity market.
RBC Capital Markets strategist Abbas Keshvani warned the move "raises the probability of Indonesia being downgraded to a frontier market" — a classification one tier below emerging — and flagged the risk of USD/IDR breaking through 18,000 next week.
MSCI's final ruling on Indonesia's market status is expected in June. This reflects a divergence within EM itself: on the same day the broad index hit a record, one country faced the risk of being ejected from the group.
What to watch in the second half? Barclays names three threads
Barclays strategists Christian Keller and Silvia Ardagna wrote that second-half performance hinges on three variables: whether the U.S.–Iran peace deal can keep oil prices suppressed, the Fed's rate path, and the scale of AI-related capital expenditure.
In plain terms = the first thread sets the cost side (energy), the second sets the price of money (rates), the third sets the growth narrative (tech spending) — together they form the fundamental framework for EM in the second half.
Whether Hormuz can reopen in a stable, sustained way still depends on shipowner risk appetite, Iran's transit-fee arrangements, and the durability of the deal — making it the key variable for whether this rally holds.
Content is for reference only, not financial advice.