Expectations of US-Iran Ceasefire Cause Oil Prices to Plummet
Jakarta, CNBC Indonesia — Global oil prices reversed sharply lower in Wednesday morning trading (25/3/2026), after previously surging amid tensions in the Middle East conflict.
The market is now shifting focus from supply concerns to hopes of easing the conflict.
According to Refinitiv data as of 09.30 WIB, Brent crude was recorded at US$98.31 per barrel, a significant drop from the previous day’s close of US$104.49. Meanwhile, West Texas Intermediate (WTI) crude stood at US$87.99 per barrel, also weakening from US$92.35.
This decline follows a sharp rally in recent days. Even on 20 March, Brent had touched US$112.19, while WTI was at US$98.32.
Citing Reuters, price pressure has emerged alongside growing expectations of a ceasefire between the United States and Iran. Washington is reported to have submitted a 15-point peace proposal to end the conflict that has long disrupted energy distribution from the Middle East region.
According to analyst Hiroyuki Kikukawa of Nissan Securities Investment, the market is engaging in profit-taking after signals of de-escalation emerged. However, he emphasised that the future direction remains uncertain, given that negotiation success is not guaranteed.
The conflict had previously caused major disruptions to global energy distribution, particularly in the Strait of Hormuz, a vital route through which about one-fifth of the world’s oil and gas supplies pass. The International Energy Agency (IEA) even described the situation as one of the largest supply disruptions in history.
Nevertheless, there are signs of supply adjustments. Saudi Arabia is reported to have increased exports through the Yanbu port in the Red Sea to nearly 4 million barrels per day, as an effort to avoid distribution bottlenecks in the Strait of Hormuz.
On the other hand, Iran is beginning to signal easing by allowing non-hostile ships to pass through the Strait of Hormuz, though they must still coordinate with local authorities. This step is one of the factors alleviating market concerns in the short term.
However, risks have not entirely disappeared. If the conflict heats up again, especially if it affects energy facilities in the region or triggers a total closure of the Strait of Hormuz, oil prices could potentially surge sharply in a short time.
The oil market is currently moving quickly, sensitively, and highly dependent on geopolitical dynamics. For the time being, hopes of peace are sufficient to pressure prices downward.