Brent Crashes 13% — Iran Ceasefire Triggers Biggest Oil Rout Since the 1991 Gulf War

Brent crude plunged 13–14% on Tuesday evening and Wednesday morning, falling to approximately $93–95 per barrel from around $109 in the pre-ceasefire session. WTI followed, dropping more than 15% and breaking below $95 per barrel. It was the largest single-session decline in oil prices since the 1991 Gulf War, stripping approximately $14 per barrel of war risk premium from crude within hours of Trump's announcement.

The trigger was the April 7 ceasefire. Trump's central condition — a 'complete, immediate, and safe' reopening of the Strait of Hormuz — carries direct consequences for global supply. Since late February, the strait has been effectively closed following Operation Epic Fury, halting the transit of roughly 17–20 million barrels per day and severing approximately 20% of global seaborne oil and fuel trade. The ceasefire announcement collapsed the market's assumption that this disruption would persist.

OPEC+'s 206,000 bpd — Overtaken by Events

The scale of the oil price move underscores how geopolitically inflated crude prices had become. On April 5, just three days before the collapse, eight OPEC+ members announced a combined 206,000 barrels per day production increase for May: Saudi Arabia and Russia each contributing +62,000 bpd, Iraq +26,000 bpd, and the UAE +18,000 bpd. Markets dismissed the hike entirely — it represented less than 1.2% of the volume stranded behind the Hormuz blockade and couldn't reach refineries regardless of wellhead output.

With the ceasefire reversing the blockade calculus, the same 206,000 bpd hike now layers onto a potential supply-normalisation scenario. Saudi Arabia retains a fiscal buffer — its break-even Brent sits around $78–80 per barrel — but the kingdom's margin has narrowed sharply from the wartime pricing that had pushed Brent near $120 at peak.

Analysts cautioned against treating the ceasefire as a full normalisation. The residual war premium of $4–6 per barrel signals markets are not yet convinced the Hormuz reopening will materialise on Iran's timeline. A two-week framework with undefined operational steps leaves significant path risk. The direction of travel is clear; the pace of arrival is not.