Oil markets responded swiftly to the 7 April announcement of a ceasefire between the US and Iran, with Brent futures prices dropping by $14.52/B to $94.75/B on 8 April. The scale of the price decline appears excessive as the road to any market normalization will be slow, with the disruption of the past five and a half weeks requiring months to unwind even under a best-case scenario.
Such a scenario looks a long way off. There is no guarantee that the ceasefire will lead to a peace agreement given the gulf in stated positions that remains between the US and Iran and complicated by the fact that the first days of the ceasefire were marked by continued attacks and contradictory statements from both parties (MEES, 10 April). As such, oil producers, traders and shipping firms will proceed cautiously. (CONTINUED - 936 WORDS)
