Analysts expect oil prices to keep easing as the US-Iran deal reopens the Strait of Hormuz.
Oil prices fell again on Thursday after the United States and Iran reached an agreement to end their conflict, reopen the Strait of Hormuz, and lift US sanctions on Iranian crude. Economy Middle East reported Brent crude down 1.72 percent to $78.18 a barrel and West Texas Intermediate down 1.90 percent to $75.33 by mid-morning GMT.
The drop extends a longer decline. Trading Economics noted that Brent has fallen around 38 percent since hitting a four-month high in April, when the closure of Hormuz triggered what the International Energy Agency called the largest supply disruption in the history of the oil market.
Major banks have cut their forecasts. OilPrice.com reported that Goldman Sachs lowered its Brent estimate for the fourth quarter of 2026 to $80 a barrel from $90, and trimmed its 2027 average to $75 from $80. Its analysts expect tanker traffic through Hormuz to recover fully by the end of July. Morgan Stanley made a similar move, cutting its third-quarter Brent forecast to $90 from $100, while holding its fourth-quarter view at $80.
The longer-term projections point lower. The IEA said the market could move into a significant surplus by 2027, projecting global supply growth of around 8 million barrels per day against demand growth of about 2 million. IEA Executive Director Fatih Birol welcomed the deal and called for Hormuz to reopen without conditions to restore confidence in energy markets.
The restart may be gradual. CNBC reported that industry executives warned it could take weeks, and in some cases months, to clear the backlog of ships waiting to transit the strait. Naval forces must certify safe corridors, war-risk insurers must restore coverage, and authorities in Oman, the UAE, and Iran must coordinate shipping lanes before flows return to normal.
Oil Price Forecast for Pakistan Signals Further Fuel Cuts
Pakistan imports most of its fuel, which ties domestic prices closely to global movements.
Petrol prices have already been falling. Pakistan cut petrol by Rs4 to Rs373.78 per litre effective June 13, the fifth consecutive downward revision according to the Petroleum Division notification. That followed a Rs22 per litre cut on both petrol and diesel earlier in the cycle.
The next review may bring a larger reduction. Mettis Global reported that Pakistan was set to slash retail fuel prices in its upcoming fortnightly review, with estimates pointing to reductions of up to Rs20 per litre on petrol and as much as Rs35 per litre on high-speed diesel. The projection was based on a fall in international refined product costs, with the ex-refinery cost of diesel dropping more than Rs35 per litre week-on-week.
The government collects a Petroleum Development Levy of Rs106 per litre on petrol and Rs53 on diesel, which affects how much of any global decline reaches consumers. Mettis Global noted that a reduction could prove short-lived if geopolitical tensions escalate or supply disruptions resurface.
Oil Price Forecast Tests UAE and Gulf Producers
For the UAE and other Gulf producers, the reopening of Hormuz allows output stranded during the war to return to market.
A return to normal flows could allow Saudi Arabia, the UAE, and Iraq to restart millions of halted barrels, according to Trading Economics. Gulf flows had already risen toward 11 million barrels per day in the days before the signing.
The price environment for exporters has shifted with the forecasts. With banks projecting Brent near $75 to $80 a barrel through 2027 and the IEA flagging a possible surplus, producers face lower prices than during the war-driven spike. The UAE has expanded its non-oil sectors in recent years, while government budgets across the region remain linked to oil revenue.
The deal still faces a 60-day technical negotiation period, after which the two sides aim to reach a final settlement. The Hormuz restart has not yet been tested at full volume, and shipping flows remain below pre-war levels. Future fuel price adjustments in importing countries will continue to track international crude movements, exchange rates, and levy policies.
