Iran's Peace Signals Pressure Global Oil Prices

HOUSTON - Global oil prices weakened at the close of trading on Tuesday (31 March 2026) local time, or early Wednesday (1 April 2026) WIB, following media reports that Iran is prepared to end the war under certain conditions. Citing Reuters, the Brent crude contract for June delivery fell $3.42 to $103.97 per barrel, pressured by reports that Iranian President Masoud Pezeshkian has opened the possibility of ending the conflict if certain assurances are provided. Meanwhile, the US West Texas Intermediate (WTI) crude price weakened by $1.50, or 1.46 per cent, to $101.38 per barrel. On the other hand, the Brent contract for May, which has expired, closed up $5.57, or 4.94 per cent, at $118.35 per barrel. Over March, oil prices recorded a sharp surge. Brent posted a monthly gain of up to 64 per cent, the highest since 1988. Meanwhile, WTI jumped around 52 per cent, the largest since May 2020. This increase was triggered by the escalation of the Iran conflict, which disrupted energy infrastructure in the Middle East and caused the worst oil and gas supply disruptions in history. “Once again, the market seems to have lost its footing due to the alleged statement from the Iranian President. If hostilities end soon, the Strait of Hormuz could reopen and supplies would return to the market, eliminating much of the risk premium in prices,” he said. The Strait of Hormuz is a strategic route through which around one-fifth of the world’s oil and gas supplies pass, so any disruption immediately triggers price spikes. A Reuters survey also showed that OPEC oil production plunged by 7.3 million barrels per day in March to 21.57 million barrels per day, the lowest level since the peak of the Covid-19 pandemic in June 2020, due to forced export cuts. Nevertheless, the market remains shrouded in uncertainty. US Defence Secretary Pete Hegseth warned that if Iran does not reach a peace agreement, the conflict will continue with higher intensity in the coming days. “With market buffer stocks increasingly thinning, vulnerability to a prolonged closure of the Strait of Hormuz brings us closer to the potential for physical oil shortages in various regions, and the upward price momentum is likely to strengthen further,” said Rystad Energy analyst Lin Ye. Amid mixed diplomatic signals, market players assess that uncertainty will remain high. In addition, incidents of attacks on Kuwaiti oil tankers at Dubai port as well as a surge in US crude oil inventories have added to market volatility in recent days. “Although there are diplomatic signals, the reality on the ground shows that uncertainty will continue. Even if de-escalation occurs, recovery of damaged infrastructure will take time, so supplies will remain tight,” said SS WealthStreet founder Sugandha Sachdeva.