Ceasefire does not equal stability: Three structural risks in Iran's post-war energy market

June 24, 2026, Asian trading hours, international oil prices continue their decline. According to Gate Market data, Brent crude futures are at $76.29 per barrel, down 1.02%; WTI crude futures are at $72.41 per barrel, down 1.09%. Compared to the peak during the conflict when Brent briefly surged above $120 per barrel, the decline has exceeded one-third.

Market narratives are clear: the US and Iran have signed a ceasefire memorandum, the Strait of Hormuz has resumed navigation, and the US has granted a 60-day exemption from Iran oil sanctions. Geopolitical risk premiums are rapidly diminishing.

But a ceasefire does not equal stability. A more pertinent question is: after the rapid elimination of "war premiums," what new equilibrium will the energy market face? Rystad Energy explicitly warns that oil prices will still carry a residual geopolitical risk premium of $5 to $10 per barrel. This is not a contradictory judgment but an accurate positioning of the current market state—ceasefire reduces tail risks but does not eliminate uncertainty; it only changes the form of that uncertainty.

Uncertainty One: The "Incomplete Restart" of Hormuz

The biggest current market misconception may be equating "agreement signing" with "supply recovery."

Before the conflict, the Strait of Hormuz saw about 130 commercial ships passing daily, transporting roughly 20 million barrels of oil per day. During the conflict, this number dropped to just 1 ship on some days, averaging about 10 ships daily—a 95% reduction.

Since the agreement, navigation has indeed resumed. From June 18 to 22, a total of 144 ships passed through the strait, averaging nearly 29 ships per day, about 20% of pre-conflict levels. However, this recovery speed is far below initial market expectations at the time of signing.

Multiple physical obstacles are slowing the pace of recovery. First, the international recognized navigation route in the central strait is threatened by mines, with many maritime authorities warning ships to avoid the area. Second, as of June 24, over 250 oil tankers and 440 cargo ships remain stranded in the Gulf, with over 80% of oil tankers stationary or anchored. Third, Iran has explicitly required ships to obtain its transit permits to pass through the strait, yet the issuing agency itself is under US sanctions. Phillips 66 CEO described the full reopening of Hormuz as a "long, sluggish, rhythmic" process.

This means that even if the geopolitical "ceasefire" holds, the physical supply chain recovery will still be a process measured in weeks or even months. Daniel Hynes, senior commodities strategist at ANZ, bluntly states: "The difficult phase is still ahead; this will be a very challenging recovery process."

Uncertainty Two: The Probability of Geopolitical Reversals Cannot Be Ignored

Market pricing of the ceasefire often implicitly assumes that the agreement will hold. But the fragility of the current Middle East geopolitical landscape cannot be underestimated.

The US-Iran memorandum is essentially a 60-day temporary arrangement. Both sides need to reach final agreements on key issues such as Iran’s nuclear program, sanctions relief details, and the long-term management mechanism of the strait during this period. Rystad Energy has raised the probability of a narrow US-Iran agreement from 40% to 55%, meaning there remains a 45% chance of scenarios outside a narrow agreement. The firm specifically notes risks including: "Lebanese situation, implementation disputes, and differences in understanding of the agreement text."

Lebanon’s front is another critical spillover risk. Although Israel and Hezbollah reached a ceasefire on June 20, days of prior escalation threatened the entire US-Iran peace process. Iran’s Islamic Revolutionary Guard Corps (IRGC) also unilaterally announced the closure of the strait after the signing. These signals indicate that regional armed actors’ actions are not fully synchronized with diplomatic progress.

Even if diplomatic progress continues, the long-term management of the strait remains a hidden mine. Iran and Oman have begun discussions on a management agreement, including transit fee issues. Iran has shown intentions to impose charges on passing ships. Mishandling this could spark new friction.

CNBC cites analysts saying, "Energy shocks are far from over," and the market is entering a "more uncertain, more turbulent" new phase. Westpac also warns: "While easing global tensions is good news, the devil is in the details, and uncertainty will remain high."

Uncertainty Three: Structural Demand Weakness Coupled with Supply Recovery

If the first two uncertainties concern "how much and how quickly supply can recover," the third concerns a more fundamental question: even if supply fully recovers, is demand still there?

The International Energy Agency’s June 2026 oil market report lowered the full-year global oil demand forecast to 103.29 million barrels per day, down about 1.12 million barrels per day from 2025’s 104.41 million barrels. This downward revision is 700k barrels per day larger than previous estimates.

Demand weakness stems from multiple factors. High oil prices during the conflict already suppressed end-user consumption; the recovery pace of major consumers like China has fallen short of expectations; and the long-term energy transition trend continues to suppress fossil fuel demand. Huatai Securities has accordingly lowered its oil price forecast, expecting Brent to average $82 per barrel in 2026 and further decline to $70 in 2027.

Meanwhile, supply-side pressures are mounting. On June 7, OPEC+’s seven core members agreed to increase production by 188k barrels per day in July, marking the fourth consecutive month of output increases. The UAE continues expanding capacity after leaving OPEC+, and new export pipelines bypassing Hormuz are accelerating construction. Non-OPEC+ countries like Brazil, Guyana, and the US are launching new projects. Iran’s oil exports are also recovering—by June 23, Iran’s daily exports in June reached 565k barrels, a 72% rebound from the previous month, with market expectations that within 1-2 months, exports could reach 1 to 1.3 million barrels per day.

Simultaneous increases in supply and decreases in demand point to a clear direction in economics: downward pressure on prices. But this does not mean oil prices will fall without resistance. Global oil inventories are at unusually low levels—OECD stocks are at their lowest since 1990; US strategic reserves are at a 43-year low; Cushing inventories have fallen to 20.03 million barrels, approaching the 20 million operational warning line. Low inventories mean markets will be highly sensitive to any new supply shocks.

Conclusion

Since the ceasefire agreement was signed, oil prices have fallen over 40% from wartime highs. This decline reflects both the rational easing of geopolitical risk premiums and market optimism about rapid supply recovery. But as Rystad Energy points out, we will not return to pre-crisis oil market conditions but are entering a more uncertain, more turbulent new phase.

The physical process of Hormuz navigation reopening is constrained by mine clearance, vessel scheduling, insurance, and financing bottlenecks, and cannot be achieved overnight. Geopolitical risks have not disappeared with a memorandum—core issues like nuclear negotiations, Lebanon, and strait management remain unresolved. And the structural demand weakness may continue to suppress oil prices over the coming quarters.

For market participants, understanding that “ceasefire does not equal stability” may be more important than short-term price predictions. In a market where residual risk premiums still reach $5 to $10 per barrel and both supply and demand face significant uncertainties, the real challenge is not predicting direction but managing volatility.

FAQ

Q: Why are oil prices still falling after US-Iran ceasefire?

The market is rapidly unwinding the previously priced "war premium." During the conflict, Brent briefly surged above $120 per barrel; after the ceasefire, expectations of supply disruption have greatly diminished, leading to price declines. However, current declines also reflect market optimism about rapid supply recovery, which remains uncertain.

Q: How long will it take for Hormuz to fully reopen?

This is a physical process, not a policy decision. Threats from mines, over 250 oil tankers stranded in the Gulf, and Iran’s requirement for transit permits all complicate the process. Industry leaders describe it as a "long, sluggish, rhythmic" process that could take weeks or months.

Q: What is a geopolitical risk premium? How much is it expected to be in 2026?

A risk premium is the extra cost embedded in oil prices to compensate for geopolitical uncertainties. Rystad Energy estimates that even after the US-Iran memorandum, a residual risk premium of $5 to $10 per barrel will remain. Ceasefire reduces tail risks but does not eliminate uncertainty itself.

Q: How soon can Iran’s oil exports recover to pre-sanction levels?

As of June 23, Iran’s daily exports in June reached 565k barrels, up 72% from the previous month. Experts expect it could reach 1 to 1.3 million barrels per day within 1-2 months, and 1.7 to 2 million barrels within 3-6 months. The pace depends on sanctions implementation, payment arrangements, insurance, and strait security.

Q: What is the outlook for global oil demand?

The IEA forecasts 2026 global oil demand at 103.29 million barrels per day, down about 1.12 million barrels from 2025. High prices, slower-than-expected economic recovery in key countries like China, and the ongoing energy transition are collectively suppressing demand.