Crude Oil Breaks Tension Plateau: How US Ceasefire Extension Keeps Global Energy Market on Edge

Crude oil prices showed remarkable restraint in early Asian trading on Wednesday, despite the extension of the ceasefire involving Iran. The market is reacting less to political de-escalation and more to profound, persistent supply risks. Tensions remain high, keeping global crude futures sensitive to any change in the volatile West Asia region.

Market Reaction and Immediate Price Action​

On April 22, Brent crude hovered around $98 per barrel. This level follows a significant rally, with the price having risen almost 10% over the last two sessions. West Texas Intermediate traded near $90 per barrel. The market has shown little immediate movement despite the US extension of the ceasefire, which allows time for a unified proposal to conclude the West Asia conflict.

This period of hesitation contrasts sharply with recent volatility. Just two days prior, Brent briefly tested the $100 mark. This movement was linked to the sudden cancellation of a planned visit by US Vice President JD Vance to Pakistan.

Geopolitical Undercurrents Driving Energy Volatility​

The primary source of market uncertainty remains the stability of critical maritime chokepoints. Shipping activity through the Strait of Hormuz, a key global artery carrying about 20% of worldwide oil and LNG supplies, has remained largely stalled. Reports indicated that only three vessels crossed this vital waterway over the past 24 hours.

Adding to the instability, the political friction points remain unresolved. While US President Donald Trump confirmed that the US would refrain from fresh attacks on Iran, he stated that blocking ships linked to the country would continue until talks are finalized, a move described by Iranian leaders as an act of war. Further adding to the tension, the Israeli military reported that Hezbollah launched rockets at its troops in southern Lebanon, accusing the Iran-backed group of breaching the ceasefire.

Expert Outlook: Structural Price Support and Future Scenarios​

Analysts broadly anticipate that the market is moving into a phase characterized by structurally higher oil prices. They note that the current ceasefire is seen as temporary, making a return to pre-conflict levels of $70 to $75 unlikely in the near term.

Experts expect short-term price fluctuation to occur between $80 to $85 on the downside, and $95 to $100 on the upside. Macquarie analysts cautioned that even with easing tensions, crude prices are likely to find support in the $85 to $90 range. They predict a gradual upward move toward $110 as global flows normalize.

However, the potential for major disruption remains a concern. Macquarie warned that if disruptions continue through April, Brent could spike to as high as $150 per barrel. Furthermore, Nuvama Institutional Equities highlighted that a prolonged closure of the Strait of Hormuz, which handles approximately 20 million barrels per day, could push crude prices into the $110 to $150 range, underscoring the global market's profound sensitivity to physical supply constraints.