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After 6 weeks of intensive conflict, the United States and Iran have agreed to a conditional two-week ceasefire, announced on April 8, 2026. U.S. President Donald Trump set a deadline for the deal, which came after weeks of intense hostilities.

Under the agreement, Iran has agreed to pause its blockade and reopen the vital Strait of Hormuz, a key route for about 20% of global oil exports.

US Trump Calls It a “Total Victory”

President Trump described this deal as a “total and complete victory” for the United States and pledged U.S. support to clear the backlog of ships in the Strait of Hormuz. The agreement came just hours before a Trump-issued deadline that threatened strikes on Iran’s infrastructure if Iran did not comply.

Impact on Global Oil & Gas Market

· Massive Oil Price Swings: Oil prices have gone down quickly because of tension around the Strait of Hormuz. When the conflict became more serious, global oil prices jumped above $110 per barrel. Later, when there were hopes of a ceasefire, prices dropped back below $100 per barrel.

· Fuel Prices Stay High: Fuel is still expensive. The U.S. Energy Information Administration (EIA) says that about 9.1 million barrels of oil per day from the Middle East could be offline in April because of the conflict. The conflict has reduced supply and kept oil prices high.

· Oil & Gas Production Problems: Energy company Shell lowered its first-quarter gas production forecast. The company said the conflict disrupted operations in Qatar and damaged facilities, including the Pearl gas-to-liquids plant in Ras Laffan.

This disruption has made natural gas supplies less stable and pushedgas prices higher in many parts of the world.

Economic Border Impact

1. Market & Investor Sentiment

· A big global bank like UBS reduced its 2026 targets for the S&P 500. The main reason is ongoing uncertainty caused by the conflict and the risk of higher energy prices. When oil and gas prices are unstable, it makes investors more cautious about putting money into the market.

· Because of the continued geopolitical tension, investors are also demanding a higher “risk premium." This means they expect better returns for taking on more risk.

2. Oil Flow & Productions Shut-Ins

· This created a major problem for oil-producing countries Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain. Many producers had to reduce or temporarily stop production because they could not move oil through the strait. This made existing supply storage even worse and pushed prices higher.

· If the conflict gets worse again, or if the Strait of Hormuz is restricted another time, global oil supplies could stay tight for months, and the energy price could become high and push pressure on the global economy.

Get updates on the US vs. Iran conflict.

What’s happening right now?

· Ceasefire in effect conditionally for two weeks

· Oil prices have fallen sharply from recent highs but remain above pre-war levels.

· Fuel price may stay high if the Strait of Hormuz reopens because the production is already distributed and it takes time for supply to return to normal.

· The conflict has damaged facilities and slowed operations, which means less oil and gas will be produced than expected.