Commerzbank’s Thu Lan Nguyen notes that Brent prices dropped by USD 15 on news of a two‑week U.S.–Iran ceasefire and reopening of the Strait of Hormuz, but still trade near USD 95, well above pre‑war levels. She see this as justified by lingering geopolitical and infrastructure risks, with supply disruptions and reconstruction needs likely to keep Brent supported.

Short term relief, persistent risk premium

"Brent crude oil prices immediately fell by USD 15. However, at around USD 95 per barrel, prices remain significantly higher than before the outbreak of the war. This appears justified given the ongoing uncertainty about whether the ceasefire will be fully honored."

"There is also uncertainty about how quickly maritime traffic through the Strait of Hormuz can be restored. IEA [International Energy Agency] Chief Fatih Birol had pointed out that significant damage to the region's energy infrastructure speaks against a rapid normalization of supply. According to statements by Birol, approximately 75 energy assets had been "severely or very severely" damaged."

"Experts estimate reconstruction costs to be around USD 25 billion, with gas infrastructure and refineries being heavily impacted. Consequently, persistent supply disruptions are expected, particularly for gas and middle distillates."

"Following the announcement of a 14-day ceasefire between the U.S. and Iran, European gas prices temporarily fell by nearly 20%. The Strait of Hormuz is set to remain open for these 14 days. Even if the sea routes are safe for two weeks, the supply situation remains complicated."

"Overall, however, the situation in the gas market remains tense, meaning gas prices are likely to continue trading at levels well above pre-crisis levels."

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