Skip to main contentEnergy prices saw a sharp downward correction this morning following President Trump’s announcement of a two‑week ceasefire.
The agreement between the United States and Iran, brokered by Pakistan, could potentially bring an end to a six‑week conflict that has claimed thousands of lives, engulfed much of the Middle East, and severely disrupted global energy markets.
Trump announced the agreement late on Tuesday, just two hours before a deadline he had imposed on Iran to reopen the blocked Strait of Hormuz or face the destruction of its “whole civilisation”.
The Strait of Hormuz is central to the Iran–US ceasefire agreement. Under its terms, the US has committed to halting strikes on Iran for two weeks in return for the reopening of this vital shipping route. The agreement followed Tehran’s submission of a ten-point peace plan aimed at ending the conflict. Iran’s foreign minister said the country’s military would oversee the safe passage of vessels through the Strait of Hormuz during the ceasefire.
Details of Iran’s demands to President Trump have emerged after the ceasefire deal, including a steep $2 million charge per vessel for passage through the Strait of Hormuz. Revenue from these transit fees is reportedly earmarked for the reconstruction of Iranian infrastructure damaged during the conflict. Meanwhile, Iran’s Revolutionary Guards (IRGC) said they will heed the temporary ceasefire but warned that they are ready to return to war if the “enemy makes another miscalculation.”
Gas prices fell sharply following the ceasefire announcement. Near-term gas contracts are down roughly 20% compared with last night’s close, with the front‑month May‑26 contract trading at 109.77p/th and the Winter‑26 contract at 110.92p/th. Longer‑dated contracts have recorded smaller but still significant declines, with both Summer‑28 and Winter‑28 down by more than 6%. Oil prices have also dropped substantially, with front‑month Brent crude falling by over 16% to $91.75/bbl.
Despite this decline, prices remain elevated because a significant risk premium is still priced in. Uncertainty continues over the durability of the ceasefire and the pace at which energy supplies can normalise, leaving markets cautious and highly sensitive to any signs of escalation or de‑escalation.
If you are unsure what this means to your business, or you would like to talk about the impacts of this development, please reach out to our Trading and Risk team directly here.
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