Oil prices dropped sharply after President Trump announced a cease‑fire with Iran, but the market remains constrained by ongoing hostilities in the Gulf. Iran continued striking targets across the Arabian Peninsula while Israel hit Lebanon, leaving shippers wary of the Strait of Hormuz. Analysts say no producer will restart output until tankers move safely through the waterway.

Helima Croft of RBC Capital Markets warned that drones and missiles still circling the strait make any vessel passage risky, a sentiment echoed by Columbia University's Jason Bordoff, who said regular tanker traffic is needed to restore confidence. Full tankers anchored off Muscat must clear the narrow channel before fuel can reach Asian buyers, a step that could signal broader market reopening.

Even if ships resume, restarting production will be gradual. Estimates suggest 10 percent of global oil supply was shut down after the February 28 U.S.–Israel attacks on Iran. Engineers will need weeks to depressurize reservoirs and repair damaged sites, meaning the region’s output will not rebound overnight.