Expert: Iran-US Peace Deal Would Provide Positive Sentiment for Energy Markets

Energy economist from Padjadjaran University (Unpad), Yayan Satyaki, stated that peace between Iran and the United States would be a positive sentiment for global energy markets because it has the potential to depress world crude oil prices. “There will definitely be a price decline, and it could impact Pertamax fuel, but to reach a price of Rp12,300 again will not happen quickly,” he said in a statement received in Jakarta on Thursday. He said the downward trend in oil prices would eventually affect non-subsidised fuel prices in the domestic market, including Pertamax. However, he assessed that a decline in Pertamax prices back to the level of around Rp12,300 per litre would not occur in a short time. He predicted that the decline in world oil prices would take place gradually. In this scenario, oil prices could be corrected by around 1 percent to 3 percent per day and last for several months. Nevertheless, the direction of global energy price movements will still depend heavily on geopolitical developments and the level of success in implementing peace between the two countries. Yayan said the market also needs to observe the dynamics of Brent crude prices, which are currently showing a weakening trend. He said Brent prices have the potential to continue falling until early July 2026 before potentially rising again in August to September 2026 as summer ends in northern hemisphere countries. “We see Brent prices continuing to decline, and it is likely they will keep falling until early July. After that, they could potentially rise again from early August to September when summer ends,” he said. Furthermore, Yayan assessed that the global oil market will not enter a new price equilibrium in the near future. According to projections from the Short Term Energy Outlook (STEO) published by the US Energy Information Administration (EIA), the market is still in a transition phase towards a new balance. He said the increase in US oil production, which is estimated to reach 14 million barrels per day, will be one of the main factors holding back the rise in world oil prices after peace is achieved. Assuming the conflict ends and global energy supplies stabilise, Yayan estimated that world oil prices would move in the range of 80-90 US dollars per barrel until the end of the year. Subsequently, prices have the potential to fall further to the range of 75-85 US dollars per barrel by the end of the year or early next year.