Oil Prices Expected to Remain High Despite Iran-US Ceasefire

Apr 8, 2026

77 min

Apr 8, 2026 09:31

Why oil prices are expected to stay high even after temporary Iran-US ceasefire

## Temporary Ceasefire Eases Immediate Concerns

A temporary ceasefire between the United States and Iran has led to a decrease in oil prices, with West Texas Intermediate, Brent Crude, and Murban crude all experiencing significant drops. The ceasefire, announced by Donald Trump, aims to restore navigation through the Strait of Hormuz, a crucial route for global oil flows.

## Geopolitical Risks Persist

Despite the ceasefire, the geopolitical risk premium remains embedded in oil prices. Iran has agreed to maintain safe passage through the Strait of Hormuz during the truce, but markets are still wary of potential disruptions. Oil prices have risen over 60% during the conflict, and traders are cautious about the possibility of renewed tensions.

## Potential for Price Increases

If tensions persist or escalate, oil prices could rise significantly, with estimates suggesting they could reach $120 to $130 per barrel, or even higher. Disruptions could impact up to 10% of global oil supply and 20% of gas flows. Although OPEC+ plans to increase output, this may not fully compensate for potential losses if the situation worsens.

## Market Sentiment and Future Outlook

The ceasefire has led to a relief rally in risk assets, but the focus is now on compliance and diplomatic progress. The two-week truce is seen as a temporary measure, and markets are closely monitoring whether it will lead to a more lasting peace agreement. For now, oil prices are influenced more by geopolitical developments than by market fundamentals, with elevated prices likely to persist unless a durable agreement is reached.

Read the full story at the source

What you need to know to get Emirates ID?

Leave your details and get a guide as a gift to avoid mistakes

Article contents