Oil Prices Set for Largest Weekly Loss in 10 Months After Ceasefire

Attacks have cut Saudi oil output by 600,000 bpd, but ceasefire agreement leads to 11-12% drop in Brent and WTI benchmarks this week

Apr. 10, 2026 at 12:08pm

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An abstract composition of overlapping triangles and rectangles in shades of blue, red, and yellow, conceptually representing the disruption and volatility in the global oil supply caused by the conflict in the Middle East.Geometric abstraction illustrates the volatility and uncertainty in the global oil market amid the ongoing Middle East conflict.Washington Today

Oil prices were poised for their biggest weekly declines since last June despite Friday's modest gains, as a ceasefire agreement between Iran and the U.S. brokered by Pakistan led to an 11-12% drop in Brent and WTI benchmark prices this week. However, fighting has continued and the flow of oil through the Strait of Hormuz remains heavily restricted, keeping futures prices near $100 a barrel and pushing prices in the physical market to record highs.

Why it matters

The conflict in the Middle East has significantly disrupted global oil supply, with attacks on Saudi energy facilities cutting the kingdom's oil production capacity by about 600,000 barrels per day. The effective shutdown of the Strait of Hormuz, a crucial artery for oil and gas flows, has also contributed to the acute scarcity in the physical oil market, even as futures prices have priced in a partial normalization.

The details

According to the report, about 50 infrastructure assets in the Gulf have been damaged by drone and missile strikes over nearly six weeks since the conflict started, with approximately 2.4 million bpd of oil refining capacity taken offline. The Strait of Hormuz remains effectively constrained, with traffic through the strait less than 10% of normal volumes as Tehran asserts its control by warning ships to keep to its territorial waters. Iran has also proposed charging fees for ships to pass through the strait under a peace deal, which has been pushed back by Western leaders and the U.N.'s shipping agency.

  • On February 28, the U.S. and Israel launched airstrikes on Iran, sparking the conflict.
  • On April 7, a Tehran official told Reuters that Iran wants to charge fees for ships to pass through the Strait of Hormuz under a peace deal.
  • On April 9, Saudi state news agency SPA reported that attacks on Saudi energy facilities have cut the kingdom's oil production capacity by about 600,000 barrels per day and reduced its East-West Pipeline throughput by about 700,000 bpd.
  • On April 10, Lebanon said it intends to take part in a meeting with U.S. and Israeli representatives in Washington next week to discuss and announce a ceasefire in the parallel war waged by Israel against Iran's Hezbollah allies in the country.

The players

Iran

A Middle Eastern country that has been involved in the conflict with the U.S. and Israel, leading to disruptions in global oil supply.

United States

A global superpower that has launched airstrikes on Iran, contributing to the ongoing conflict in the Middle East.

Israel

A Middle Eastern country that has also been involved in the conflict with Iran, leading to a parallel war waged by Israel against Iran's Hezbollah allies in Lebanon.

Pakistan

A country that has brokered a ceasefire agreement between Iran and the U.S.

Saudi Arabia

A major oil-producing country in the Middle East, whose energy facilities have been targeted by attacks, cutting the kingdom's oil production capacity.

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What they’re saying

“The Strait of Hormuz remains effectively constrained and operation of the global oil system is far from normal.”

— Ole Hansen, Saxo Bank analyst

“Iran wants to charge fees for ships to pass through the strait under a peace deal.”

— Tehran official

What’s next

Lebanon said it intends to take part in a meeting with U.S. and Israeli representatives in Washington next week to discuss and announce a ceasefire in the parallel war waged by Israel against Iran's Hezbollah allies in the country.

The takeaway

The ongoing conflict in the Middle East has significantly disrupted global oil supply, with attacks on Saudi energy facilities and the effective shutdown of the Strait of Hormuz contributing to acute scarcity in the physical oil market. While a ceasefire agreement has been brokered, the situation remains volatile, and the impact on oil prices and global energy markets is likely to continue in the near term.