24MAY

Oil Retreats From Peak Amid Ceasefire Speculation

1 min read

14:49UTC

Brent crude eased to $110.47 from its $116 peak, but remains 64% above pre-war levels with the strait operating at a fraction of normal capacity.

← Back to Trump says deal; OFAC says nothing Jump to analysis ↓

ConflictAssessed

Key takeaway

Markets priced in ceasefire hope; the supply disruption remains.

Brent Crude traded at $110.47 per barrel, retreating from the $116 peak on 28 March. The pullback may reflect ceasefire hopes from the Islamabad talks, though the fundamental supply picture has not changed. the strait of Hormuz remains over 90% below pre-war transit volumes at 53 weekly transits against a baseline of 966.

The price remains roughly 64% above pre-war levels of $67.41 per barrel. Analysts had warned that $150 per barrel was possible if the strait stays closed another month. The Islamabad Accord's immediate-reopening provision is the first diplomatic instrument that directly addresses the oil price mechanism, which may explain why markets have responded to the framework's existence even before Iran has accepted it.

The modest retreat should not be mistaken for normalisation. The IEA, IMF, and World Bank jointly described this as one of the largest supply shortages in energy market history . That assessment has not changed.

Deep Analysis

In plain English

Oil prices dropped slightly from their highest point of the war, possibly because traders think the new Pakistan peace plan might work. But prices are still about 64% higher than before the war started. The strait that most of the world's oil passes through is still barely open. If the peace plan fails, prices could rise sharply again.

What could happen next?

Markets pricing in ceasefire probability; failure would trigger sharp reversal

Sources:CNBC

Mentions:Brent Crude →Strait of Hormuz →Iran →Islamabad →Pakistan →IMF →World Bank →

First Reported In

Update #60 · Pakistan's Ceasefire Plan Fills the Vacuum

CNBC· 6 Apr 2026

Read original →

Causes and effects

Caused by

Global Energy Bodies Declare Historic Supply Shortage

IEA/IMF/World Bank calling this the largest supply shortage in energy market history (ID:1986) contextualises the oil price retreat as modest relative to the underlying disruption.

Occurred 4 Apr 2026

Read story →

This Event

Oil Retreats From Peak Amid Ceasefire Speculation

The price retreat, while modest, is the first sustained pullback since the war began. It suggests markets are pricing in a non-zero probability of ceasefire from the Islamabad talks. However, with Hormuz at roughly 5% of pre-war transit volumes, the fundamental supply disruption remains unchanged.

Different Perspectives

Lloyd's of London

The Joint War Committee left Hormuz war-risk premiums at $10-14 million per voyage on 25 May, declining to move on Brent's 5% fall. The JWC's protocol requires a UN Security Council resolution or bilateral government certification letter before de-listing, and neither has arrived: a verbal understanding does not satisfy the formal condition the reinsurance market's treaty terms require.

Gulf Arab producers

Saudi Arabia and UAE depend on Hormuz for their own crude exports; Aramco CEO Nasser has warned no oil market recovery arrives until 2027 if the blockade continues past mid-June. Monday's $98.96 Brent settlement shortens nothing for Gulf producers without a signed instrument and a Pentagon mine-clearance timeline that runs up to six months post-ceasefire.

Qatar

Qatar holds $12bn of frozen Iranian assets at the centre of the sequencing dispute but cannot release them without explicit US Treasury authorisation, given the original freeze was a US instrument. As the asset-holding state, Qatar's leverage is real but passive: it is the escrow holder, not the decision-maker, and any resolution requires US Treasury sign-off that Trump has withheld.

Pakistan

With both Prime Minister Sharif and army chief Munir simultaneously in Beijing on 25 May, Pakistan has for the first time consolidated its civilian and military mediation tracks under China's roof. Munir's direct Tehran-to-Beijing flight signals that the security and financial threads of the sequencing problem are now being worked in parallel rather than sequentially.

China

Beijing hosted Pakistan's principal mediators and Iran's China envoy Ghalibaf simultaneously on 25 May while its banking regulator capped new state-bank lending to five sanctioned refiners. China is simultaneously the most credible third-party underwriter of the $12bn sequencing and the state whose institutions face live OFAC secondary-sanctions exposure if the deadlock persists through GL V's expiry.

United States

Trump posted on 24 May that the blockade holds until a deal is certified and signed, ruling out the informal MOU structure both sides had been building. The 'certified, and signed' condition is the first operational bar Trump has attached in 87 days, but it arrived without an executive instrument, maintaining the gap between posted ultimatum and signed US policy.