Analysts: Oil and gas prices may take months to return, ceasefire offers relief for now

The temporary ceasefire in the Middle East is a relief for energy markets, but any fall in fuel or gas prices is likely to be very gradual for now. That is according to comments by analysts to the Czech News Agency (CTK). The return of fuel prices to pre-war levels could take several months, they say, while gas prices may take even longer. The analysts also noted that much will depend on how the geopolitical situation develops, which could still prove complicated.

Markets have been volatile in recent weeks amid rising tensions following US and Israeli strikes on Iran, which began at the end of February. Tehran subsequently restricted shipping through the Strait of Hormuz, which normally carries around a fifth of global oil and gas supplies, raising fears of supply disruptions and pushing prices higher. US President Donald Trump said in the early hours of today CEST that he had agreed to suspend strikes on Iran for two weeks and was ready for a ceasefire.

According to XTB analyst Jiří Tyleček, the announcement of a temporary ceasefire is unequivocally positive news for energy markets. Some of the war-risk premium is therefore being rapidly erased from oil prices. But, Tyleček said, this does not mean that fuel prices at petrol stations will fall just as quickly. “The price of oil is only one component of the final price at the pump. Refining margins, transport, distribution, shipping insurance and taxes also play a major role, and in Europe they make up a very significant share of the final price,” Tyleček explained.

He therefore does not expect any significant reaction at petrol station forecourts in the coming days. “Petrol stations will sell through stocks purchased at previously higher prices, and any further decline is likely to be gradual rather than sudden,” he noted. Tyleček also recalled that the entire transport chain has experienced major delays in recent days. “Oil prices may drop on the exchange within hours, but restoring physical delivery logistics to normal takes considerably longer — up to several months,” Tyleček added.

According to Purple Trading analyst Petr Lajsek, prices will first need to see proof that the Strait of Hormuz is truly open and that a similar number of ships is passing through it as before the war. “Moreover, it may take several months for oil production and exports from Middle Eastern countries to return to pre-war levels, given the considerable damage to infrastructure. It could therefore take months for fuel prices to return to normal,” Lajsek said.

According to analysts, the situation with gas may be even more sensitive. “The gas market will remain nervous because of Qatar, as the Ras Laffan industrial complex is one of the world’s most important LNG hubs. The attacks may also have caused more lasting damage to some of the infrastructure. That is why oil prices could fall somewhat faster than gas prices once the conflict subsides,” Tyleček said.

According to Kryštof Míšek, chief economist at Argos Capital, market movements indicate that traders have begun rapidly repricing the risk premium associated with the conflict and are shifting from an escalation scenario towards expectations of at least partial de-escalation. However, he also noted that many of Iran’s conditions are highly problematic. “If it turns out that the strait will face more lasting restrictions or substantial fees, commodity prices could rise again,” Míšek warned. He also did not rule out the possibility that commodity prices may never return to pre-war levels. “The impact on price growth in the economy could therefore be greater than it may seem, even with the current easing of tensions,” Míšek added.