Crude Oil Plunges Below $95 Amid Hope of U.S.-Iran Truce: Where Will Prices Head Next?

Oil prices experienced a noticeable dip in early Thursday trade, fueled by burgeoning optimism surrounding diplomatic efforts between the U.S. and Iran. Market sentiment improved as traders speculated that the two-week ceasefire could be extended, signaling potential de-escalation in the West Asia conflict. Furthermore, reports suggesting Iran might allow transit through the Strait of Hormuz are easing immediate supply concerns for global energy players.

Brent and WTI See Significant Pullback on April 16​

The global benchmarks reacted immediately to the growing peace talks. Brent crude futures fell by 44 cents, or 0.5%, settling at $94.49 a barrel at 0021 GMT. Meanwhile, the U.S. West Texas Intermediate (WTI) crude mirrored the decline, dropping 70 cents, or 0.8%, to $90.59 a barrel.

These declines reflect the immediate impact of potential geopolitical stabilization on crude supply fears. Previously, the conflict involving Iran caused the largest disruption ever to global oil and gas supplies, particularly through the critical Strait of Hormuz.

De-escalation Efforts Focus on Strait of Hormuz Stability​

Diplomatic channels remain highly active as U.S. and Iranian officials consider returning to Pakistan for further peace negotiations. The ongoing discussions aim to resolve the West Asia conflict, where Iran has restricted traffic through a key strait. This route accounts for around 20% of global oil and LNG flows.

A Reuters report highlighted that sources briefed by Tehran suggest the country may permit free movement of ships along the Omani side of the Strait of Hormuz, contingent on a deal being struck to avoid further escalation. The White House expressed hope of reaching an end to the conflict while simultaneously warning that economic pressure on Tehran would intensify if cooperation falters.

Experts Forecast Volatility But Point to Structural Price Support​

Market experts generally agree that the current ceasefire is temporary, expecting prices to remain highly volatile until a formal agreement is reached and normal navigation fully resumes. Until stability is confirmed, WTI prices are predicted to range within $80 to $100.

Brokerage firm Macquarie noted that even if tensions moderate, oil prices are likely to stay supported in the $85 to $90 range. They anticipate a gradual movement toward $110 as flows through the Strait of Hormuz normalize, adding that disruptions extending through April could see Brent rising to $150 per barrel.

Long-Term Bullish Viewpoints Suggest Price Rise​

Several analysts are adopting a more bullish, long-term stance on crude oil prices. Kayanat Chainwala of Kotak Securities predicts oil could rise to $120 per barrel in the near term, with the potential to touch $150 if the conflict continues.

Similarly, Nuvama Institutional Equities views the continued closure of the Strait of Hormuz—which handles approximately 20 million barrels per day—as a factor that could push crude prices into the $110–$150 per barrel range. Ajit Mishra of Religare Broking believes the market may be entering a structurally higher price phase, expecting the current truce to fade over several months.

Near-Term Price Range Consensus​

In the immediate term, experts recommend caution while maintaining defined price boundaries. Ajit Mishra expects crude to operate within a defined range, projecting a downside limit between $80 to $85 and an upside support between $95 to $100. Collectively, these views underscore that while immediate drops signal temporary relief, the underlying long-term price trajectory remains vulnerable to geopolitical instability.