Friday marks the highly anticipated signing of a 60-day ceasefire agreement with two main objectives: gradually restoring oil tanker traffic from the Persian Gulf to global markets, and advancing negotiations on Iran’s nuclear program. The deal hinges on two conditions—Israel halting its military operations in Lebanon and the simultaneous release of Iranian assets frozen in Western banks under sanctions.
A Deal with Asymmetrical Gains
At first glance, this appears to be a negotiation where Iran stands to gain most—securing the resumption of its oil exports, long sought by Tehran—while offering little beyond de-escalation. Calling it an ‘Iranian defeat’ or a ‘victory for Trump and Netanyahu’ would misrepresent the dynamics at play. That said, this isn’t the central focus of today’s analysis from Oikoklastika.
The Two Scenarios
The ‘good scenario’ assumes the agreement holds—and that maritime activity resumes across the Strait of Hormuz. But there’s also a ‘bad scenario’: renewed conflict in the Gulf, potentially triggered if Tel Aviv sabotages the deal through fresh attacks on Lebanon or even Iran itself—risking another closure of the Strait.
Why Prices Won’t Fall Back Quickly
Even under the optimistic scenario, reopening the Strait does not instantly restore supply chains. It only begins the slow restart of Gulf oil exports—whose pace depends on two key factors.
First, regional production and export capacity has been severely damaged—not just in Iran, but across Gulf states whose infrastructure has suffered far greater destruction than widely reported. Second, major importing countries (excluding China) have drawn down strategic reserves to critically low levels. As a result, current demand is now many times higher than immediate consumption needs.
In plain terms: even though energy prices may dip initially, they will remain significantly elevated compared to pre-28 February levels—already high before the crisis escalated. According to expert assessments, easing this surge in demand—even under ideal geopolitical conditions—is not a matter of months, but of much longer timeframes.
This sustained demand pressure continues to push up prices not only for crude oil and natural gas, but also for downstream products and related commodities like fertilizers and petrochemicals.