Brent Holds Near $95 as Ceasefire Hopes Steady Oil, But Hormuz Flows Remain at 10% of Normal

Oil markets stabilised Wednesday, with West Texas Intermediate settling near $91 per barrel and international benchmark Brent near $95, as traders positioned for a potential ceasefire extension between the US and Iran. The rally reversed sharp losses triggered by the collapse of first-round Islamabad talks and the announcement of a US naval blockade of Iranian ports on April 12, which had briefly pushed WTI back toward $100.

The Supply Gap That Cannot Be Papered Over

Goldman Sachs estimates Strait of Hormuz throughput at approximately 2.1 million barrels per day on a four-day moving average — roughly 10% of the 21 million b/d that transited the waterway before the conflict. The IEA's April 14 Oil Market Report characterises the disruption as the largest single oil supply shock on record, with an estimated 12 to 15 million barrels per day effectively removed from global supply since the strait's near-closure in late February.

At its April 5 meeting, OPEC+ approved a production increase of 206,000 barrels per day for the month. The decision is widely regarded as a messaging exercise rather than a supply intervention: with Saudi Arabia, the UAE, Kuwait, and Iraq unable to materially increase exports through the blocked strait, the hike exists largely on paper. The EIA raised its 2026 Brent price projection to $96 per barrel on April 15, implying the agency sees limited near-term downside even if diplomacy advances.

The price history of the past six weeks illustrates the volatility baked into every headline. Brent plunged from near $128 per barrel on April 2 — its war-time peak — to the low $80s on the initial ceasefire announcement on April 8, then rebounded sharply when talks failed and the naval blockade was imposed. Wednesday's stabilisation near $95 represents a compressed risk premium: markets are pricing partial diplomatic progress but not a full Hormuz reopening.

For GCC energy exporters, the asymmetry is painful. Elevated Brent prices would ordinarily be a windfall, but the inability to move barrels through Hormuz means output is either shut in or rerouted at significant cost through overland pipelines and alternative corridors. Saudi Arabia's East-West Pipeline offers partial relief, but its capacity of roughly 5 million b/d is insufficient to compensate for the full loss of Hormuz transit. Any confirmed ceasefire extension Thursday would likely push Brent modestly lower, but a durable Hormuz reopening — the true supply catalyst — remains contingent on a political settlement that is still weeks away at best.