The announcement of a conditional two-week ceasefire between the United States and Iran has not led to a significant easing of oil and petrochemical prices in Asia, as traders remain wary about the durability of the agreement and the timeline for resuming normal oil flows through the Strait of Hormuz [1][2][3][4]. Despite the ceasefire, the Strait of Hormuz—a critical chokepoint for global oil and petrochemical shipments—remains largely blocked, with Iran only indicating a possible reopening later in the week, contingent on further agreements [3][4].
Brent crude initially dropped 14% to $95 per barrel on the ceasefire headlines, and equities surged to one-month highs, reflecting initial relief in global markets [3]. However, Brent futures subsequently edged up to $97 per barrel as supply risks persisted [3]. West Texas Intermediate (WTI) oil prices also advanced, trading around $91.90 per barrel during Asian hours, driven by renewed supply concerns and ongoing constraints in the Strait of Hormuz [4].
Japanese authorities are considering an additional release of oil reserves equivalent to 20 days of domestic consumption in May, as uncertainties over safe passage through the Strait of Hormuz continue [2]. This would be in addition to the ongoing release of about 80 million barrels (50 days' worth of consumption) from state, private, and Gulf country reserves, with 30 days' worth set to be released by the end of April [2]. Prime Minister Sanae Takaichi has expressed support for a possible joint oil stockpile release by International Energy Agency (IEA) members, who have already begun coordinated releases totaling over 400 million barrels since mid-March [2].
Market analysts and traders note that the risk premium in Asian petrochemical prices remains intact, supported by both geopolitical risks and lingering logistical disruptions [1][3][4]. Technical analysis indicates that key support levels for benchmark petrochemicals are firm, with no immediate sign of a significant price correction as long as concerns persist regarding the Strait of Hormuz [1]. Analysts at Standard Chartered expect logistical disruptions, security concerns, high insurance costs, and operational constraints to limit additional energy flows through the strait over the next two weeks [4].
Iranian media reported a halt in tanker traffic following fresh Israeli strikes in Lebanon, with Iranian officials accusing the US of breaching key clauses of Iran’s 10-point proposal and calling further talks "unreasonable" [4]. Meanwhile, US Vice President JD Vance signaled that the strait could begin reopening as he leads a US delegation to Islamabad for direct talks with Iran this weekend [4]. Traders remain reluctant to unwind geopolitical risk premiums due to the lack of clarity on the outcome of US-Iran negotiations and the ongoing security situation [1][3][4].
CONCLUSION
Despite the US-Iran ceasefire, oil and petrochemical prices remain elevated as the Strait of Hormuz stays blocked and market participants remain cautious. Governments and industry players are responding with additional reserve releases and close monitoring of diplomatic and shipping developments. The market impact is high, with risk premiums likely to persist until there is clear evidence of restored oil flows and regional stability.