Oil prices posted their sharpest decline since the Gulf war began in February 2026 after the United States and Iran agreed to a temporary two-week ceasefire.
Brent crude for June delivery fell to $95.57 per barrel, while West Texas Intermediate (WTI) for May delivery was trading at $96.99 per barrel, retreating into the mid $90s range. The decline followed Tehran’s decision to allow safe passage for vessels through the Strait of Hormuz for two weeks.
The truce is intended to create space for formal peace talks, which are scheduled to begin in Pakistan. Standard Chartered has warned that the price correction may be too steep and that oil could quickly spike again if tensions re-emerge or conflict rhetoric intensifies.
According to the bank, oil prices are likely to remain $10 to $20 per barrel above pre-war levels due to ongoing supply risks, shipping disruptions, and strategic reserve buying. It noted that uncertainty over safe vessel movement through Hormuz continues to weigh on insurance costs and freight rates.
Standard Chartered estimated that 426 tankers, 34 LPG carriers, and 19 LNG carriers remain stranded near the strait, underlining the scale of the disruption. The report added that Iran’s effective control over shipping flows is unlikely to remain acceptable to Gulf producers over the longer term.
The bank said rising United States LNG export capacity in 2026 is expected to help offset lost Middle East volumes.
