Oil prices after ceasefire: Outlook, risks, and forecasts

Are post-ceasefire oil prices set to fall further, or is another surge coming? This analysis explores the outlook, risks, and market dynamics shaping crude in a fragile post-shock environment.

Oil is now trading in a “post-shock” regime following the recent US–Iran ceasefire and the partial reopening of the Strait of Hormuz, a key artery for global crude flows. The truce has stripped out a significant portion of the geopolitical premium that built up during the conflict, but prices remain well above pre-war levels, and the forward curve is still skewed toward upside risk rather than a full collapse.

In this article, I break down where post-ceasefire oil prices are currently trading, what the market is actually pricing in, and how the ceasefire is reshaping short- and medium-term dynamics. I also walk through the key scenarios ahead—base case, upside, and downside—and explain how I think traders and analysts could approach this still fragile, headline-driven market.

Exness Trade app

Trade with confidence anytime, anywhere.

Download now

Current oil prices after the ceasefire

Following the two-week US–Iran ceasefire deal and conditional reopening of the Strait of Hormuz, Brent and WTI both slumped by 13–15%, with WTI sliding back below 100 into the mid‑90s.

Even after that drop, WTI and Brent are still trading roughly in the mid‑90s, versus pre‑war levels near 70 USD, suggesting a sizable geopolitical premium is still embedded.

What the ceasefire means for oil prices

Given that the ceasefire is conditional and explicitly described as “fragile” by US officials, it hinges on the immediate reopening of Hormuz and continued de‑escalation.

The announcement sparked a sharp relief move, global stocks rallied, bets on rate‑cuts came back into play, and oil sold off hard as traders priced a partial normalization of flows through a chokepoint that handles about 20% of global crude.

However, analysts stress that a truce does not guarantee a swift return of tankers or full restoration of output; disruption risk, enforcement issues, and the possibility of renewed strikes keep the risk premium from vanishing.

In practice, the market has moved from pricing “open‑ended supply shock” to “temporary easing with persistent tail risks,” which justifies a one‑time step down in price rather than a full round‑trip to 70 USD.

How the ceasefire is affecting price dynamics

Short-term price moves

Volatility remains high, ING notes, as crude oscillates on either side of 100 USD amid mixed ceasefire headlines, and big US inventory builds keep traders whipsawed intraday.

EIA data show a fifth straight US crude stock build, with a 6.9 million-barrel increase and Cushing inventories jumping, which mechanically leans bearish in the near term and adds to the pullback momentum off the highs.

Medium-term outlook

Goldman Sachs has cut its Q2 forecasts, predicting Brent reaching 90 USD and WTI reaching 87 USD, explicitly citing a reduced front‑end risk premium and the expectation that Hormuz flows will gradually normalize over about a month.

But the bank left its H2 forecasts roughly unchanged, with Brent predicted to hover around the 82-80 USD mark and WTI around 77-75 USD. and still sees risks skewed to the upside under any scenario in which the ceasefire breaks down or production losses persist.

So the ceasefire has flattened the front of the curve and pulled the spot lower, but the curve still reflects a market that is tight with optionality rather than loose and comfortable.

Oil price outlook: Base case vs risks

Base case forecast

Flows through Hormuz recover over the coming weeks, some production gradually returns, demand softens a bit under still‑high prices, and “higher for longer” monetary policy.

On this path, Brent roughly averages around 90 in Q2 and then eases toward the low‑80s into year‑end, with WTI reaching about 3–5 USD  below those levels.

Prices remain well above pre‑conflict levels, but without re‑testing the 110–120 USD spike zone unless new shocks emerge.

Upside risk: Ceasefire breakdown

If the truce collapses and the reopening the strait is delayed or partial, Goldman’s adverse case has Brent around 100 USD in Q4, even assuming production ultimately recovers.

In a more severe scenario with persistent circa 2 million b/d production loss, Brent could push toward 115 USD, with WTI not far behind, effectively repricing the full geopolitical‑premium.

Downside risk: Peace and weaker demand

A credible, extended ceasefire plus clear normalization of shipments, ongoing stock builds, and softer macro data could push prices down toward the high‑70s to low‑80s that many models treat as a longer‑run equilibrium.

But most current commentary emphasizes how unprecedented the disruption was and how fragile the settlement remains, which is why consensus has not yet shifted to a deep bear case.

How traders should read this market

The ceasefire has moved oil out of an extreme tail‑risk regime and into a high‑volatility range regime, sharp two‑way moves around mid‑90s for WTI, and mid‑90s–low‑100s for Brent, anchored by headlines on implementation of the truce and vessel flow out of Hormuz.

Front‑month prices now trade closer to, but still above, banks’ revised fair‑value bands. Further downside from here likely needs confirmation of sustained export recovery and continued inventory builds, while renewed military incidents could quickly reload the upside.

Oil is no longer pricing “worst‑case war,” but it is still very much a geopolitics‑driven market, with a base case gravitating toward the high‑80s or low‑90s over the next quarter and asymmetric upside if the ceasefire frays.

Final thoughts: My outlook for oil prices

In my view, post-ceasefire oil prices are no longer in crisis mode, but they are far from stable. The market has clearly stepped back from pricing a worst-case supply shock, yet it still carries a meaningful geopolitical premium because the situation remains fragile. I think the most likely path is a gradual drift lower toward the high-80s to low-90s range, but that depends heavily on whether flows through Hormuz normalize as expected. At the same time, I see the risks as asymmetrical—any breakdown in the ceasefire or renewed disruption could quickly push prices higher again. For now, this feels like a headline-driven, high-volatility market rather than one anchored in fundamentals.

Disclaimer: This article reflects the personal views and opinions of the author and is provided for informational purposes only. It does not constitute financial or trading advice, and should not be relied upon as a basis for making investment decisions.