Strait of Hormuz Opens… Crude Slips, Yet a Major Alert Emerges

New Delhi: A peace agreement has been reached between the US and Iran, and the movement of oil and gas tankers through the Strait of Hormuz has resumed. Following Donald Trump’s announcement of the US-Iran deal, international crude oil prices saw a sharp decline, slipping to around $80. Crude oil prices fell for the second consecutive day on Tuesday.

While crude oil prices have slipped, a major alert regarding crude has also been issued. Brokerage firm Emkay Global stated that although oil prices dropped immediately due to the easing of Middle East tensions, they could surge again in the coming weeks.

Oil Could Cross $90!
In its report, brokerage firm Emkay Global projected that due to persistent imbalances in the physical market, there is a significant risk of crude oil prices rising towards—or even exceeding—$90 per barrel in the coming weeks. The report noted that even after the US-Iran breakthrough, a delay in the normalization of supplies is expected, and the return of pent-up demand—primarily from China—could drive up oil prices.

Emkay stated in its note, “It could take weeks, or perhaps even months, to restore supplies via the Strait of Hormuz to normal levels. Consequently, if pent-up demand returns rapidly, there is a risk that oil prices could gradually climb to $90 per barrel or higher in the coming weeks.”

Crude Oil Slips 5% in a Single Day
Looking at the drop in Brent crude prices following the US-Iran peace agreement, the price fell to $80 on Monday; it closed at $80.75 per barrel, marking a 5% decline. As for Tuesday, crude oil has risen from recent levels but is still trading around $82.

Crude Oil Targets
Regarding crude oil targets, Emkay Global has indicated that while there have been some adjustments to its forecasts, oil prices are expected to remain high during the first half of FY2027, with an average of $85 per barrel projected for the second half. The brokerage stated that it is maintaining its Brent forecast at $90 per barrel for the 2027 fiscal year.

However, offering a note of relief, Emkay Global projected that a sustained decline in prices should occur after the first half of 2027, with oil prices potentially falling to $70 per barrel by the end of the fiscal year.

Trump Says: “Start Your Engines”
The US has reached an agreement with the Islamic Republic of Iran. In a post shared on the social media platform Truth Social, Donald Trump stated that the Strait of Hormuz would be open without a toll system. The US is lifting the naval blockade imposed on Iran. He further declared, “Ships of the world, start your engines—let the oil flow!”