Brent drops 10.5% on week as US-Iran ceasefire deal reported

Brent's 10.5% weekly loss is its steepest since the week ending 6 April, while West Texas Intermediate (WTI) shed 9.2% over the same period, its sharpest weekly drop since the week ending 13 April. At the time of writing, July Brent sat at $92.47 a barrel and WTI at $87.52 a barrel, with both benchmarks having swung by as much as $6 intraday on conflicting signals about the three-month conflict.

The trigger was a Reuters report that Washington and Tehran had agreed on Thursday to extend a ceasefire and lift shipping restrictions through the Strait of Hormuz, the waterway that handles roughly 20% of global oil and liquefied natural gas (LNG) supplies. US President Donald Trump had not yet approved the deal at the time of publication, and Iranian state media stated that no agreement had been finalised, leaving the position fluid.

The chart below shows Brent over the last six months, against which this week's sell-off can be read.

What this means for UK commercial energy buyers

A sustained Brent retreat feeds into UK wholesale costs through two routes: LNG import pricing, which competes with pipeline gas on the National Balancing Point (NBP), and the broader commodity risk sentiment that shapes power forward curves. A softer oil complex, if it persists, tends to drag NBP season-ahead contracts lower over weeks rather than days.

Key variables shaping whether the move holds:

• Strait of Hormuz traffic, currently well below pre-war levels, and the pace of any reopening
• Upstream production recovery, which analysts at ING describe as gradual given storage constraints and damaged infrastructure
• Formal sign-off from President Trump, without which the ceasefire extension remains unconfirmed
• Refinery restart timelines in the region, where some capacity was damaged during earlier strikes
• NBP front-month and season-ahead response through next week's trading sessions

IG analyst Tony Sycamore noted that if the ceasefire narrative holds, Brent could drift towards trendline support in the low $80s. ING cautioned that even a full Hormuz reopening would deliver relief gradually: upstream curtailments taken to manage storage will unwind slowly, and refinery output increases take time, particularly where infrastructure requires repair.

Watch the formal status of the US-Iran agreement over the weekend. Confirmation from Washington would likely extend the Brent sell-off into next week and put downward pressure on NBP summer and winter contracts; a breakdown in talks could reverse a portion of this week's move quickly. Buyers with renewals falling in Q3 or Q4 2025 should track NBP season-ahead closely over the next five trading sessions.