By- Thadeu Dos Santos, Regional Director at Infinox
“Oil prices fell sharply as markets reacted to the announcement of a two-week conditional cease-fire between the U.S. and Iran, raising hopes of near-term de-escalation and a gradual improvement in regional supply and shipping conditions. The truce includes steps aimed at restoring safer transit through the Strait of Hormuz, a key global oil chokepoint. However, the situation remains fragile, and markets are likely to stay headline-sensitive as negotiations continue and compliance risks remain in focus.
Despite the relief move, physical constraints have not disappeared. Supply chains and shipping schedules remain disrupted, and a return to normal operations may take weeks even if the truce holds. As a result, crude export flows could be restored only gradually, which may limit the speed of any further downside in prices even after today’s pullback.
In Latin America, the impact remains two-sided. Sustained elevated oil prices would generally support net exporters through improved trade balances and fiscal revenues, while higher energy costs can still feed inflation risks and tighten financial conditions across the region depending on domestic policy settings.”
