Oil Posts Steepest Weekly Loss of the Iran War as Ceasefire Hopes Build

Oil Posts Steepest Weekly Loss of the Iran War as Ceasefire Hopes Build ICE Brent crude is heading for a 7% weekly decline after Washington and Tehran signaled willingness to negotiate, though analysts warn supply disruption risks remain underpriced. ICE Brent crude front-month dropped below $96 a barrel on Tuesday, extending a selloff that has wiped more than 7% off the international benchmark this week, as traders priced in the possibility that the U.S.-Iran war could be approaching its end.² The move accelerated after President Donald Trump posted on Truth Social that talks with Iran were making progress, then postponed planned strikes on Iranian energy infrastructure for five days. That single announcement sent crude plunging more than 10%, according to analysts, as markets interpreted the pause as a de facto opening for negotiations.^7,6 Brent fell to $95.54 a barrel on Tuesday, down 3.8% on the session, while U.S.-traded West Texas Intermediate dropped 6.1% to $92.85, according to market data. The declines came despite the Strait of Hormuz remaining effectively closed to normal commercial traffic and ongoing supply disruption across the Middle East.² Trump then announced a two-week ceasefire, sending equities surging and crude into freefall. U.S. crude oil closed down 16.4% to $94.41 per barrel in a single session, its largest one-day decline since 2020. International Brent crude fell 13.3% to $94.75.³ The S&P 500 closed up 2.5% on the ceasefire announcement. Strategists on JPMorgan Chase's trading desk said the index could rise further "as euphoria returns to markets," adding that if the ceasefire holds, the market would likely treat it as a de facto end to the conflict.³ Montel reported that by late in the week, the global benchmarks were trading around 4% lower on a weekly basis, even after Brent futures recovered 5.7% and WTI gained 4.6% in a partial bounce. The rebound suggested the ceasefire announcement had been at least partially walked back by subsequent events.¹ Official statements from Washington and Tehran did not offer a clear picture of what comes next. Trump asserted the war would end "very quickly," but disruption to Middle Eastern supply continues, and investors remain wary. Brent crude futures fell another 5% to $105.61 a barrel mid-week on one session where the "very quickly" rhetoric met skeptical positioning.⁴ Not all analysts share the market's optimism. Citi said it expected Brent to rise to $120 a barrel in the near term, arguing that oil markets are underpricing the risk of prolonged supply disruption. Wood Mackenzie echoed that view. PVM analysts warned that global oil stocks could reach critically low levels if the conflict drags on.⁴ The IEA has already deployed significant strategic reserves. All 32 member countries agreed to release 400 million barrels of oil stocks to ease supply constraints, according to IEA Executive Director Fatih Birol. He framed the release as manageable. "Four hundred million barrels is only 20% of our resource," Birol said. "We have still 80% in our pocket."² The drawdown in strategic reserves underscores the physical tightness that persists beneath the headline price moves. European spot premiums for jet fuel have dipped to their lowest level since the war began, down to a $99 per metric tonne premium over ICE gasoil futures, according to Argus, suggesting that the sharpest supply anxiety in refined products may be easing.⁵ The weekly price action has been volatile enough to leave traders struggling to position. Oil prices posted a 7% weekly loss even as the underlying supply picture remained disrupted, with Hormuz transit limited to a handful of tankers operating with transponders switched off. The market is trading the headline, not the barrel count.⁵ What happens next depends entirely on whether the ceasefire holds and whether negotiations produce something durable. The gap between diplomatic rhetoric and physical supply reality is wide, and closing it will take more than a Truth Social post.