Brent loses over $10/bbl on US-Iran ceasefire plan

The front-month ICE Brent contract has plunged by $14.95/bbl on the day, to trade at $94.41/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent has held firm throughout the month, supported by a sharp escalation in Middle East tensions, including supply disruptions and strikes on key energy infrastructure across the region.

There is a “stark difference” between the physical and financial markets' pricing of oil, according to ANZ Bank’s senior commodity strategist Daniel Hynes. About 9 million b/d of oil from Persian Gulf producers are expected to be shut in through April, Hynes said citing data from the US Energy Information Administration (EIA).

The front-month Brent futures contract opened the year at $61/bbl, while finishing the first quarter at $118/bbl, according to the EIA.

“The disruptions are real and likely to be felt for some time. This is likely to see volatility remain high,” Hynes added.

Downward pressure:

Brent crude’s price has plummeted after US President Donald Trump announced a temporary halt to military operations in the Middle East – giving the oil market a moment of relief, according to analysts.

Washington agreed to a two-week conditional ceasefire, if Iran reopens the Strait of Hormuz for commercial vessel traffic.

“Oil prices plunged below $100/bbl after the US and Iran agreed to a two‑week ceasefire, easing fears of prolonged supply disruption,” two analysts from ING Bank said.

The ceasefire is expected to halt the US‑Israeli military operations in exchange for Tehran reopening the Strait of Hormuz to international vessel movement.

“The proposed framework reportedly allows Iran and Oman to levy transit fees on vessels passing through the Strait,” ING Bank’s analysts said.

By Aparupa Mazumder

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