The reduced likelihood of a Strait of Hormuz closure following the cease-fire has restored relative calm to the market. However, the future of oil prices remains tied to a complex and shifting set of variables.  

Hamid Hosseini, commenting on the oil market’s reaction to the cease-fire between Iran and the Zionist regime, noted that oil prices are shaped by three key factors: fundamentals, economic conditions, and geopolitical developments. 

He explained that supply and demand are the primary drivers of oil prices, and currently, the market favors buyers, with global supply exceeding demand.  

Daily oil production has reached 105 million barrels, while demand stands at around 103 million barrels, Hosseini said. 

He added that eight OPEC+ members have returned 411,000 barrels per day of previously cut production to the market over the past three months.  

China, US economic reports cast shadow over oil market  

Hosseini emphasized that economic reports—particularly from China and the U.S.—can sway oil prices. Markets are also awaiting US economic data and the Federal Reserve’s interest rate decisions.  

He noted that any political shift could reshape the oil market’s outlook, while a weaker US dollar and declining US strategic reserves also play a role.  

During the recent 12-day conflict that began June 13, oil prices fluctuated sharply. Prices initially hovered around $67 per barrel but surged to $79 following Zionist regime attacks on Iran, driven by fears of escalating tensions and supply disruptions.  

US pressures producers to curb prices

Hosseini pointed to US interventions, including Trump-era warnings to Russia and Saudi Arabia over rising oil prices, which pressured markets. New market mechanisms were also introduced to curb price hikes.  

Oil-producing nations like Russia and Saudi Arabia typically prefer higher prices, but US pressure can compel cooperation, he said.  

Following the cease-fire and reduced risks to Hormuz, prices fell to around $66 and are now trading near $67.  

Oil market reacts to military developments 

Hosseini stressed that geopolitical and military events deeply impact oil markets, and the recent cease-fire has brought some stability. However, oil prices remain subject to multiple unpredictable factors.  

Historically, markets have reacted inconsistently to conflicts—prices spiked during the Iraq-Kuwait war but unexpectedly dropped during the US invasion of Iraq, he noted. This underscores the role of demand and behind-the-scenes deals in price movements.  

Oil market reactions cannot be attributed to a single factor, Hosseini said, as national policies and market perceptions also shape prices. “The oil market is too complex for simple predictions and requires comprehensive analysis,” he added.