The announcement of a peace-deal between the US and Iran, although still unclear in its details, has allowed the world to breathe a sigh of relief. The war in the middle east, ongoing since the invasion on the 28th of February, has had a devastating impact internationally, causing the closure of the Strait of Hormuz, and disrupting one of the world’s most important energy corridors.
US President Donald Trump posted the message Let the oil flow on his social media platform Truth, seeking to reassure global markets that the disruption to oil supplies had come to an end.
Oil prices plummet
In the last few days, oil prices have plummeted. West Texas International has fallen by 11.7 per cent from over 90 USD on 10th of June, to 80.56 USD on 16th of June. The fall in price was even slightly greater in the case of Brent Crude, which fell from 93.1 USD to 82.39 USD in the same period, representing a 13 per cent reduction in six days.
The closure of the Strait of Hormuz had another major consequence beyond driving up prices. It moved the centre of gravity of crude oil production and exports towards the Americas: the Americas exported 14.5 million barrels per day (bpd) in May 2026, up from 13.8 million bpd in April, and a 40% increase from May 2025. This additional crude comes not only from the United States but also from Argentina, Brazil and Venezuela, which has increased its exports significantly following the deposition of the country’s former leader Nicolás Maduro.
Industry expert and former counsel at the U.S. Commodity Futures Trading Commission (CFTC), Peter Sanchez Garda, interviewed by Money.it, argued that the war has had a profoundly transformative impact on international commodities markets. The damage inflicted on liquefied natural gas (LNG) infrastructure across the Gulf region, particularly in Qatar, has “reshaped long-term purchasing strategies among major energy consumers.”
According to Sanchez Garda, disruptions to Middle Eastern supply chains and the prospect of years-long repairs have “prompted buyers to seek greater security of supply from alternative exporters.” As a result of this, U.S. LNG producers have experienced a significant surge in demand, with “Venture Global recently securing major multi-year supply agreements with companies including TotalEnergies and Vitol.”
A still-trembling geopolitical stage
Despite the optimism that has followed the announcement of a peace deal, markets will remain cautious. The precise terms of the agreement have not yet been made public, and investors will be watching closely to see whether the commitments made by both Washington and Tehran translate into a lasting reduction in regional tensions.
In particular, international markets have shown cautious optimism in light of the news: Nasdaq has gained 2.2 per cent in the past five days, FTSE 100 2.02 per cent, Dax 1.68 per cent. Milan’s stock market similarly gained 3.2 per cent in the same period.
However, at the same time, multinational oil companies, which during the period of the war have seen large growth, have seen reductions in their stock price with the news of the reopening of the Strait of Hormuz. In the past month, Shell has lost 6.58 per cent, Total Energies 9.58 per cent, and Chevron 8.02 per cent.
The Strait of Hormuz remains one of the world’s most strategically significant maritime routes, with roughly a fifth of globally traded oil passing through it each day. Even a temporary disruption can have dramatic consequences for energy markets, shipping costs and wider inflationary pressures. While the reopening of the waterway has restored confidence for now, analysts warn that any renewed escalation could quickly reverse the recent decline in prices.
Real effects of the fall in prices
For consumers, however, the impact of lower oil prices will likely not be immediate. Petrol and diesel prices at filling stations are influenced not only by the international price of crude oil but also by refining costs, transport expenses, taxation and exchange rates, as well as state-imposed taxes.
Several countries, including Italy, Portugal, Slovenia, Hungary, Spain have reduced fuel duty temporarily following the airstrikes on Iran at the end of February. As a result of all of these factors, any reductions at the wholesale level can take several weeks to be reflected in prices paid by motorists.
Businesses with high fuel costs, including airlines, freight companies and manufacturers, could also benefit if lower prices are sustained, potentially easing inflationary pressures across the wider economy. Asked about the impact on consumers, Sanchez Garda noted that while European natural gas benchmarks fell by around 5 per cent to €44/MWh following news of upcoming peace agreement, wholesale energy markets remain highly volatile. He added that “household consumers across the European Union are still likely to face elevated utility and heating costs through next winter.”
For now, the reopening of the Strait of Hormuz has delivered a welcome reprieve to global energy markets and consumers alike. Whether this proves to be the start of a more stable period or merely a brief interruption in a volatile geopolitical crisis will depend on developments in the weeks and months ahead.
