Oil prices ease but uncertainty lingers after ceasefire

Global oil markets have shown signs of relief following the announcement of a two-week ceasefire linked to tensions involving Iran, with crude prices falling to around $96 per barrel—roughly 15 percent lower than the previous week’s peak.

Earlier in April, analysts had warned that continued hostilities and disruptions in the Strait of Hormuz could push prices as high as $130 to $150 per barrel, potentially triggering a global economic downturn. While the ceasefire has eased immediate fears, experts caution that the situation remains fragile.

Despite improved market sentiment, shipping through the Strait of Hormuz is still tightly controlled, with normal commercial traffic yet to resume. Maritime reports indicate that vessel movement remains restricted and coordinated, limiting a full recovery in global oil supply chains.

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An estimated 11 million barrels per day of oil production across the Middle East remains shut in, and restoring output depends heavily on the normalisation of export logistics. Even if shipping lanes reopen immediately, analysts suggest it could take several months—possibly until late summer—for supply levels to stabilise.

Much attention is now focused on diplomatic efforts in Islamabad, where ongoing talks are seen as critical to sustaining the ceasefire and guiding markets toward long-term stability. However, uncertainties persist, and any breakdown in negotiations could quickly reverse recent gains.

Oil producers, including members of OPEC, also face technical and logistical challenges in restoring production. Countries like Saudi Arabia and the UAE may increase output, but full recovery across the region will take time.

Meanwhile, disruptions to LNG infrastructure, particularly in Qatar, pose additional risks for energy-importing countries like Pakistan. For now, while prices have dipped, a complete return to pre-war levels appears unlikely in the near term.