ISLAMABAD: Oil prices experienced their largest drop since the Gulf War began in February 2026 because the United States and Iran reached a two-week ceasefire agreement.
Brent crude for June delivery decreased to $95.57 per barrel, and West Texas Intermediate (WTI) for May delivery traded at $96.99 per barrel, which dropped into the mid $90s range.
The decline followed Tehran’s decision to allow safe passage for vessels through the Strait of Hormuz for two weeks. The truce creates space for peace negotiations, which will start their official process in Pakistan.
Standard Chartered has warned that the price correction may be too steep and that oil could quickly peak again if tensions escalate or conflict statements become more intense.
According to the bank, oil prices will stay $10 to $20 per barrel above pre-war levels because of supply risks, shipping disruptions, and strategic reserve purchasing activities.
Uncertainty about safe vessel movement through Hormuz continues to raise insurance costs and freight rates. Standard Chartered estimated that 426 tankers, 34 LPG carriers, and 19 LNG carriers remain stranded near the strait, underlining the scale of the disruption.
The report stated that Gulf producers will not accept Iran’s complete control over shipping routes for an extended period. The bank projects that increased United States LNG export capacity in 2026 will compensate for the loss of Middle East production.
