Wells Fargo’s international economics team notes that a fragile ceasefire in the Middle East leaves Oil market risks elevated and conviction on the outlook low. They still assume active conflict ends by mid‑2026 and expect Oil to trend lower into H2 2026, but emphasize that large potential supply shut‑ins and slow normalization could keep prices and volatility higher than markets imply.

Ceasefire fails to resolve Oil risks

"The announced ceasefire looks fragile and keeps Middle East risk elevated."

"We still assume active conflict ends by mid‑year and oil trends lower into H2 2026, but conviction on the outlook remains low amid persistent geopolitical stress."

"This is a large and worsening supply shock."

"The IEA estimates potential oil supply shut‑ins near 10 mbpd, roughly 10% of global supply, with conditions deteriorating further through April."

"Ceasefire does not mean normalization. Shipping through Hormuz and energy production will recover slowly, if at all, without durable peace."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)