June 24, 2026, during the Asian trading session, international oil prices continued their downward trend. According to Gate market data, Brent crude futures traded at $76.29 per barrel, down 1.02%, while WTI crude futures stood at $72.41 per barrel, down 1.09%. Compared to the peak conflict period when Brent briefly surged above $120 per barrel, prices have now dropped by more than one-third.
The market narrative is clear: the US and Iran have signed a ceasefire memorandum of understanding, the Strait of Hormuz has reopened to shipping, and the US has granted a 60-day waiver on Iranian oil sanctions. Geopolitical premiums are rapidly fading.
However, a ceasefire does not guarantee stability. A more pertinent question is: after the "war premium" is swiftly erased, what new equilibrium will the energy market face? Rystad Energy has issued a clear warning: oil prices will still retain a residual geopolitical risk premium of $5 to $10 per barrel. This is not a contradictory assessment, but rather an accurate positioning of the current market—while the ceasefire has reduced tail risks, it has not eliminated uncertainty; it has merely changed its nature.
Uncertainty #1: The "Incomplete Restart" of the Strait of Hormuz
The market’s biggest misjudgment right now may be equating "agreement signing" with "supply restoration."
Before the conflict, the Strait of Hormuz typically saw about 130 commercial vessels pass through daily, transporting roughly 20 million barrels of crude oil per day. During the conflict, that number dropped to just one vessel on some trading days, averaging only about 10 per day—a decline of up to 95%.
After the agreement, shipping activity is indeed recovering. Between June 18 and 22, 144 vessels passed through the strait, averaging nearly 29 per day, which is about 20% of pre-conflict levels. However, this pace of recovery is far below initial market expectations following the agreement.
Multiple physical obstacles are slowing the recovery. First, the internationally recognized central channel of the strait faces mine threats, and maritime authorities from several countries have warned vessels to avoid this area. Second, as of June 24, over 250 oil tankers and 440 cargo ships remain stranded in the Gulf, with more than 80% of the tankers stationary or anchored. Third, Iran has explicitly required vessels to obtain transit permits issued by its authorities, which are themselves under US sanctions. Phillips 66’s CEO described the full reopening of Hormuz as a "long, drawn-out, rhythmic" process.
This means that even if there is a geopolitical "ceasefire," restoring the physical supply chain will take weeks or even months. ANZ Senior Commodity Strategist Daniel Hynes put it bluntly: "The difficult phase is still ahead; this will be a highly challenging recovery process."
Uncertainty #2: The Probability of Geopolitical Reversals Cannot Be Ignored
Market pricing of the ceasefire often assumes the agreement will hold, but the fragility of the current Middle Eastern geopolitical landscape should not be underestimated.
The US-Iran memorandum is essentially a temporary arrangement lasting 60 days. During this period, both sides must reach a final deal on core issues such as Iran’s nuclear program, sanction relief details, and long-term management mechanisms for the strait. Rystad Energy has raised the probability of the US and Iran reaching a narrow agreement from 40% to 55%, meaning there is still a 45% chance of outcomes outside the narrow agreement scenario. The firm specifically notes: "The agreement faces risks from the situation in Lebanon, disputes over implementation order, and differences in interpretation of the agreement text."
The Lebanese front is another critical spillover risk. Although Israel and Hezbollah reached a ceasefire on June 20, escalations in the days prior threatened the entire US-Iran peace process. Even after the strait agreement was signed, Iran’s Islamic Revolutionary Guard Corps unilaterally declared the strait closed. These signals indicate that the logic of regional armed actors does not always align with diplomatic progress.
Even if diplomatic efforts continue, the long-term management of the strait remains a hidden risk. Iran and Oman have begun negotiating a management agreement, including transit fee issues. Iran appears intent on charging vessels for passage. Mishandling this issue could spark a new round of friction.
CNBC cited analysts who stated, "The energy shock is far from over," and the market is entering a "more uncertain, more turbulent" new phase. Westpac Bank also cautioned: "While easing global tensions is good news, the devil is in the details; uncertainty will remain high."
Uncertainty #3: Structural Weakness on the Demand Side Is Overlapping with Supply Recovery
If the first two uncertainties concern "how much and how fast supply can recover," the third addresses a more fundamental question: Even if supply fully recovers, is demand still there?
In its June 2026 oil market report, the International Energy Agency (IEA) lowered its global oil demand forecast for the year to 103.29 million barrels per day, down about 1.12 million barrels from 2025’s 104.41 million barrels per day. This downward revision is 700,000 barrels per day larger than previous forecasts.
There are multiple reasons for weak demand. High oil prices during the conflict suppressed end-user consumption, the pace of economic recovery in major consuming countries like China has lagged expectations, and the long-term trend of energy transition continues to weigh on fossil fuel demand. Based on this, Huatai Securities has lowered its oil price forecast, estimating Brent crude will average $82 per barrel in 2026 and drop further to $70 per barrel in 2027.
Meanwhile, supply-side pressures are mounting. Seven core OPEC+ members agreed at their June 7 meeting to increase production by 188,000 barrels per day in July, marking the fourth consecutive month of increases. After exiting OPEC+, the UAE has continued to expand capacity, bypassing Hormuz with accelerated pipeline construction, while new projects in Brazil, Guyana, the US, and other non-OPEC+ countries are coming online. Iranian oil exports are also recovering—by June 23, average daily exports for June had reached 565,000 barrels, up 72% from the previous month, and market expectations are for a return to 1–1.3 million barrels per day within one to two months.
When supply rises and demand shrinks simultaneously, economics points to a clear direction: downward pressure on prices. But this does not mean oil prices will fall without resistance. Global oil inventories are at unusually low levels—OECD oil stocks have dropped to their lowest since 1990; US strategic crude reserves are at a 43-year low; Cushing hub inventories are down to 20.03 million barrels, nearing the operational warning threshold of 20 million barrels. Low inventories mean the market will be extremely sensitive to any new supply shocks.
Conclusion
Since the ceasefire agreement was signed, oil prices have fallen more than 40% from their wartime highs. This drop reflects both the rational unwinding of geopolitical premiums and the market’s optimistic expectations for rapid supply restoration. Yet, as Rystad Energy points out, we are not returning to the pre-crisis oil market; instead, we are entering a new phase marked by greater uncertainty and volatility.
Restoring shipping in Hormuz is a physical process, constrained by mine clearance, vessel scheduling, insurance, and financing bottlenecks—it cannot happen overnight. The risk of geopolitical reversals has not disappeared with a memorandum—the nuclear issue, the Lebanese front, and strait management remain unresolved. Structural weakness on the demand side may become a persistent force suppressing oil prices over the coming quarters.
For market participants, understanding the core judgment that "ceasefire does not equal stability" may be more important than predicting short-term oil price swings. In a market where residual risk premiums still reach $5–$10 per barrel and both supply and demand sides face significant uncertainty, the real challenge is not guessing direction, but managing volatility.
FAQ
Q: Why are oil prices still falling after the US-Iran ceasefire?
The market is rapidly unwinding the previously priced-in "war premium." During the conflict, Brent surged above $120 per barrel, but after the ceasefire, expectations of supply disruption have faded sharply, causing prices to retreat. However, the current decline also reflects the market’s optimistic outlook for quick supply recovery, and whether this optimism is fully justified remains questionable.
Q: How long will it take for the Strait of Hormuz to fully reopen to shipping?
This is a physical process, not a policy decision. The strait faces mine threats, over 250 oil tankers remain stranded in the Gulf, and Iran requires vessels to obtain transit permits. Industry executives describe this as a "long, drawn-out, rhythmic" process that could take weeks or even months.
Q: What is the energy risk premium? What is the forecast for 2026?
The risk premium is the extra compensation priced into oil to account for geopolitical uncertainty. Rystad Energy forecasts that even after the US and Iran sign a memorandum of understanding, oil prices will retain a residual geopolitical risk premium of $5–$10 per barrel. The ceasefire reduces tail risks but does not eliminate uncertainty itself.
Q: How long will it take for Iranian oil exports to return to pre-war levels?
As of June 23, Iran’s average daily exports in June reached 565,000 barrels, up 72% from the previous month. Experts expect a return to 1–1.3 million barrels per day within one to two months, and 1.7–2 million barrels per day within three to six months. The pace of recovery depends on sanctions enforcement, payment solutions, tanker insurance, and strait security.
Q: What is the outlook for global oil demand?
The International Energy Agency forecasts global oil demand in 2026 at 103.29 million barrels per day, down about 1.12 million barrels from 2025. High oil prices have suppressed consumption, China’s economic recovery has lagged expectations, and the long-term trend of energy transition continues to shrink demand.
