A driver fills up with gas at a Shell station in Miami on April 13, 2026.
Joe Radle | Getty Images
Investors cheered on Monday at the prospect of a peace deal between the US and Iran, but oil price volatility is likely to continue in the short term, with analysts warning that post-war energy markets now face a “geopolitical risk premium”.
The Westpac note said global oil stocks, reduced by the prolonged closure of the Strait of Hormuz, “will take time to rebuild and are likely to decline further before new supplies start arriving from the Gulf.”
“While the easing of global tensions is welcome news, the devil is in the details and uncertainty is likely to remain high,” the bank added.
Daniel Hynes, senior commodity strategist at ANZ, told CNBC that the energy shock was “not over yet”, adding that he did not expect shipping traffic through the Strait of Hormuz to return to pre-conflict levels anytime soon.
“We have a difficult phase ahead of us,” Hines told CNBC’s “Access Middle East” on Monday. “It’s going to be a very difficult recovery process.”
He pointed to multiple pressures, including the risk of mines in the Straits and a significant decline in oil stocks, along with maintenance and repairs of ships stranded in the Straits.
“I think it could take weeks, if not a month or two,” Hines added.
international benchmark brent crude oil August futures were last down 5.16% at $82.82 a barrel. us West Texas Intermediate Futures July crude oil prices fell 5.61% on Monday to $80.03 per barrel, the lowest level since March.
Brent crude oil.
But Hines cautioned that $80 is not enough to balance the market over the next three to six months, adding that prices are likely to remain around the “low $90s” into the third quarter.
“The market is oversimplifying things,” he said. “Iran’s control of the strait will essentially be an ongoing issue that the market will have to deal with, so prices will remain relatively elevated…Oil markets currently face a geopolitical risk premium.”
Bart Melek, global head of commodity strategy at TD Securities, told CNBC’s “Squawk Box Asia” that even if logistics through the Strait of Hormuz normalize immediately, 800 million barrels of inventory is still likely to be lost by November.
Melek said that higher oil prices and any associated inflationary implications are still “fully considered,” but that a significant jump in oil prices could be prevented if China chooses to stop drawing down inventories at some point.
“The market is pretty relieved that the deal is in place, but I don’t think we’re out of the woods yet,” he added.
The economic fallout from the Middle East conflict is already starting to hit the most vulnerable parts of the economy, Willem Sells, global chief investment officer at HSBC Private Bank and wealthy prime minister, told CNBC’s “Squawk Box Asia.”
Sells added that “challenging economic indicators, especially in South Asian countries” could cause further instability.
