Oil Prices Remain Deep in the Red, Brent Trading Around $95.20 per Barrel

As of 6:18 PM Kyiv time on Wednesday, the price of Brent crude oil futures on the ICE Futures exchange in London has decreased by $14.10, or 12.9%, bringing the cost down to $95.17 per barrel. This drop marks a significant downturn in oil prices, which have not been seen in nearly six years.

Meanwhile, West Texas Intermediate (WTI) crude oil futures for May on the New York Mercantile Exchange (NYMEX) have also experienced a sharp decline, falling by $17.16, or 16.19%, to $95.79 per barrel. Earlier in the trading session, Brent prices dipped to $90.40 per barrel, while WTI fell to $91.03 per barrel.

This unprecedented drop in oil prices coincides with news of a two-week ceasefire between Washington and Tehran. U.S. President Donald Trump announced a halt to strikes on Iran in exchange for the full and immediate reopening of the Strait of Hormuz, a strategically crucial waterway for oil transportation. Iranian authorities have confirmed their agreement to the ceasefire with the United States.

Analyst Tamás Varga from PVM Oil Brokerage commented, "Theoretically, with the reopening of the Strait of Hormuz, global oil and petroleum product supplies could return at a rate of approximately 10 to 13 million barrels per day. However, a return to the previous status quo will largely depend on whether this ceasefire evolves into a long-term peace agreement during negotiations in Pakistan."

Experts, however, emphasize that despite the anticipated resumption of shipping through the Strait of Hormuz, the physical oil shortage is unlikely to be resolved in the near term. The announcement of the ceasefire has led to a reduction in, but not a complete elimination of, the risk premium in oil prices. Prices have not returned to pre-war levels, as it will take time to rectify the extensive supply disruptions caused by the conflict, according to an analytical note from Rystad Energy.

Furthermore, Rystad has revised its average price forecast for Brent in 2026 down to $87 per barrel, from a previous estimate of $97 per barrel. This adjustment indicates that the oil market continues to face pressure, despite potential positive changes in the geopolitical landscape.

In the meantime, the U.S. Department of Energy reported that commercial crude oil inventories in the country rose by 3.08 million barrels last week, reaching a total of 464.7 million barrels. Simultaneously, gasoline inventories decreased by 1.59 million barrels, while distillate stocks fell by 3.14 million barrels.

Analysts had previously forecasted an increase in crude oil stocks by 700,000 barrels, along with declines in gasoline and distillate reserves by 1.4 million barrels and 1.5 million barrels, respectively, according to data from Trading Economics. Stocks at the Cushing terminal, where oil traded on the NYMEX is stored, increased by 24,000 barrels.