Oil Prices Hold Steady After Sharp Drop on Hormuz Ceasefire News

Front-month crude oil futures showed no change in quiet Sunday trading, with West Texas Intermediate (WTI) holding at $82.59 per barrel and Brent crude at $90.38. The lack of movement follows a dramatic sell-off on Friday, April 17, when prices plummeted on news of a temporary reopening of the Strait of Hormuz.

According to Rigzone, Brent futures retreated 9.1% on Friday to settle near $90, erasing most gains since the start of the U.S.-Iran war in late February. The drop came after Iran's Foreign Minister stated the vital waterway was "completely open" for commercial shipping during a 10-day ceasefire between Israel and Hezbollah. The Strait of Hormuz is a chokepoint for about a fifth of the world's oil.

"The market is now pricing that the war and the closure of the Strait is over," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management, in a report carried by Rigzone. However, analysts caution that the situation remains fluid. Paolo Broccardo, CEO at BankPro, noted that while a reopening could return supplies, volumes may return gradually over several weeks, leaving prices elevated. He also warned that prices "could remain at risk of a strong rebound in case of any setback in the diplomatic talks."

For Bakken producers, the price stability offers a reprieve from recent volatility but at a lower benchmark level. The Bakken differential—the discount at which Bakken crude trades versus WTI at the Cushing, Oklahoma hub—was recorded at -$3.42. This means Bakken crude is effectively priced at approximately $79.17 per barrel based on the live WTI quote.

The broader price forecast for fuels, a key demand indicator, was revised higher by the U.S. Energy Information Administration (EIA). In its April Short-Term Energy Outlook, the EIA raised its 2026 and 2027 projections for gasoline and diesel. It now sees U.S. regular gasoline averaging $3.70 per gallon in 2026 and diesel averaging $4.80 per gallon, up from March forecasts of $3.34 and $4.12, respectively.

The EIA attributed the increase primarily to higher crude oil prices, which typically constitute around half the total retail price of gasoline. It specifically forecast that the U.S. average retail diesel price would increase to more than $5.80 per gallon in April. Strong diesel margins are a positive signal for Bakken crude, which yields a high proportion of diesel and distillates.

Market observers suggest a new trading range may be forming. Naeem Aslam, CIO at Zaye Capital Markets, said the pullback reflects "a clear unwind of the geopolitical risk premium" and sees oil "consolidating within the $90-$100 range" for Brent. The immediate direction for prices is expected to hinge on diplomatic progress regarding the Strait of Hormuz and the broader U.S.-Iran conflict.