Oil Prices Drop Below $100 as Ceasefire Unwinds 'War Premium'

Oil prices maintained their position below the $100 per barrel threshold as markets digested the temporary ceasefire agreement between the U.S. and Iran, now specified for a two-week duration. This downward trend reflects the ongoing unwinding of the 'war premium' previously factored into Brent and WTI futures pricing. Adding to the bearish sentiment, Rystad Energy reduced its average Brent price forecast for 2026 to $87 from $97 per barrel. However, while futures prices soften, the physical oil market remains tight due to the time required for backlog-clearing and the normalization of operations. Analysts identify the $80 level as a critical technical support floor as the market balances long-term downgrades with immediate fundamental constraints. Volatility is expected to remain high as investors monitor the sustainability of the short-term truce and its impact on global energy supplies.