Iran Ceasefire Eases Energy Markets but Leaves Risk Premium Intact

The guns have gone quiet and markets are exhaling, but the relief is being measured carefully. "It's a good start and could pave the way to a more permanent reopening, but lots of ifs still to work out," wrote IG analyst Tony Sycamore in a note following the announcement. Brent crude (Zorrox: BRENT.) and Natural gas (Zorrox: NATURALGAS) have pulled back sharply from their highs, but the risk premium has not left the market. It has just got smaller.

A Pause in Conflict, Not a Settlement

What has been agreed is a two-week conditional ceasefire, not a peace deal. Trump announced a suspension of U.S. strikes in exchange for the complete and immediate reopening of the Strait of Hormuz. Iran agreed to halt its own attacks on the same condition, with safe transit through the strait coordinated by its military. Both sides are calling it a victory. Neither side has resolved anything fundamental.

A ceasefire without a political settlement is a pause with an unknown expiry date. Senior market analyst Daniela Hathorn of Capital.com put it plainly: "The situation remains fragile, and there is a real risk that talks break down and the conflict reverts to its previous state, or even escalates further, once the ceasefire window expires. As a result, markets are likely to treat this as a pause rather than a resolution." That is exactly how markets are treating it.

Shipping Through Hormuz Begins to Normalize

The most concrete improvement is what is happening in the Strait of Hormuz. Tanker traffic that had slowed sharply during five weeks of effective closure has begun to recover as security conditions stabilize. That matters because the shipping disruption was doing real work in tightening supply even before production was significantly affected.

The word to hold onto is partial. Christopher Haines, global head of oil at Energy Aspects, was direct about the limits of the improvement: "While the ceasefire is a positive diplomatic step and triggered a move lower in futures, nothing has yet changed in terms of physical flows from the Middle East. Iran has stated that vessels can still only transit Hormuz with its approval, in coordination with the military and subject to technical limitations." Insurance costs remain elevated, and operators are not rushing back to full normal traffic on the basis of a two-week truce that could break down at any moment.

Energy Markets Shift From Shock to Repricing

The price action since the ceasefire was announced has been significant but not complete. US crude futures fell around 16 percent on the news, and equities surged. But Goldman Sachs, which had raised its average 2026 Brent forecast to 85 dollars a barrel citing expectations of prolonged disruption, has not declared the crisis resolved. The firm still sees the LNG market staying disrupted through 2027, with margins running 200 percent higher than pre-conflict averages, and continues to flag meaningful recession risk tied to energy price levels.

Energy markets move through phases in situations like this. The first phase is fear, where prices reflect worst-case scenarios. The second phase is reassessment, where the market recalibrates around probabilities. That second phase is where things are right now, which is why prices have come down sharply but have not collapsed to pre-conflict levels. The market has stepped back from the edge. It has not declared the crisis over.

Negotiations Begin Under Fragile Conditions

The ceasefire is designed to create space for a broader negotiation, but early signals are not particularly encouraging. Economist Justin Wolfers made the point that even a quick deal would not simply reverse the economic damage already done: "The economy doesn't just snap back." Five weeks of Hormuz effectively closed, infrastructure damaged across the region, and energy prices running well above where they were before the conflict started are not conditions that unwind on a two-week timeline regardless of what gets agreed diplomatically.

Both sides continue to frame the truce as a tactical move. Iran's ten-point plan calls for sanctions removal and recognition of its authority over the Strait. Washington has described that as a workable basis for negotiation. The distance between those positions and a lasting agreement remains significant, and the negotiating environment is not one that rewards confidence.

What Would Sustain the De-Escalation

Former Goldman Sachs CEO Lloyd Blankfein captured the broader investor dilemma well before the ceasefire was announced: "You could put on hedges and those hedges could be worthless tomorrow if things go another way. I think people should be good contingency planners at this time." That advice has not expired with the ceasefire announcement.

For the truce to translate into a genuine and lasting reduction in market risk, the evidence would need to accumulate over time. Tanker traffic through Hormuz returning consistently to pre-conflict levels, military activity staying contained across the region, and negotiations producing something concrete and verifiable would all shift the market's assessment meaningfully. None of those things have happened yet, and as Hathorn noted, even in the best-case scenario the economic impact is unlikely to fade quickly.

Tips for Traders

• Watch Brent crude (Zorrox: BRENT.) for signals about whether the geopolitical premium continues to unwind or finds a floor at current levels. Goldman Sachs still has an 85 dollar average Brent forecast for 2026, which tells you how much risk the market's leading research desk still sees embedded in prices even after the ceasefire rally.

• Monitor Natural gas (Zorrox: NATURALGAS) closely. Goldman expects LNG markets to stay disrupted through 2027 with margins running significantly above historical averages. Gas markets will be slower to normalize than oil given the specialized infrastructure involved, and that lag creates opportunities in the spread between the two.

• Track tanker activity and insurance costs in the Strait of Hormuz as your leading indicator. As Energy Aspects noted, physical flows have not yet normalized despite the diplomatic announcement, and the gap between what is being said and what is actually moving through the strait is the number that matters most right now.

• Keep position sizing disciplined. Blankfein's advice to be fleet of foot and protective of positions applies now as much as it did before the ceasefire. A two-week truce with unresolved core disagreements on both sides is not a reason to abandon the caution that has served traders well throughout this conflict.