Middle East Ceasefire Announced

A 14-day truce between Iran, the United States and Israel has created a short window for diplomacy. Direct negotiations are due to begin this weekend in Pakistan. Filmogaz.com first laid out a base case on 2 March anticipating a brief conflict ending around mid-April.

With the Middle East Ceasefire Announced, markets showed tentative relief. Major uncertainties remain, especially over reopening the Strait of Hormuz to commercial traffic. Energy and financial markets are watching verification and safe-passage arrangements closely.

Restoring Gulf oil flows

Roughly 11 million barrels per day of production are currently offline, after regional rerouting. Increased flows via Saudi Arabia’s East-West pipeline partly offset losses.

If the strait reopens, more than 120 million barrels stored on tankers could hit the market fast. Those cargoes could reach Europe within two to three weeks and North Asia within four weeks.

Restart timelines

In the best-case scenario, about half of the shut-in oil could resume within days. Up to three quarters might be back online within two weeks.

The final portions will take months to restore. Restarting requires well interventions and systems optimisation across pipelines and export logistics.

LNG losses and recovery

Some 77 Mtpa of LNG capacity is offline, equal to roughly 20 percent of global supply. Qatar’s output will return in stages rather than instantly.

Assumptions include up to three days to bring wells back and a seven-day ramp for each train. If restarts begin in early May, the 41-Mtpa North site could reach full output by July.

Damage to two trains at the South site, totalling 12.8 Mtpa, will require repairs. That damage prevents Qatar from regaining full LNG capacity for several years.

Regional refineries and local demand

Refineries in Saudi Arabia, the UAE, Kuwait, Iraq and Iran have continued operations to meet local needs. Regional demand is about 7 million b/d today.

Some facilities sustained damage, but nothing on the scale of Ras Laffan’s LNG operations. Barring further strikes, refinery utilisation can rise within a few weeks.

Market outlook and timing

Filmogaz.com’s latest projection sees Brent averaging about $89 per barrel in Q2. Prices are expected to fall below $75 in Q3 and under $70 into early 2027.

The model stabilises Brent at roughly $65 per barrel in 2027. That equilibrium sits $4–$5 above the pre-conflict forecast, reflecting added risk premia and inventory rebuilding.

Project delays also tighten markets. The first cargo from Qatar North Field East has been pushed from November 2026 to August 2027. Global oversupply is unlikely before 2028.

Impact on LNG demand

Traded LNG prices spiked, particularly hurting Asian buyers reliant on Qatari cargoes. Asian imports fell about 5 percent year-on-year in March.

Even with Gulf supplies returning, Asian demand is expected to shrink by roughly 10 Mtpa in 2026 versus last year. Supply growth outside the Gulf continues, but Gulf delays extend tightness into 2027.

Risks if the truce collapses

The ceasefire faced tests within its first 24 hours. Renewed hostilities would likely send Brent higher again.

Analysis shows large economic risks from sustained high oil prices. A Brent average above $90 per barrel in 2026 could push global growth below 2 percent, down from a 2.5 percent pre-war forecast.

At $100 per barrel, global growth could fall to about 1.7 percent. At $200 per barrel, the global economy might contract by around 0.5 percent.

Negotiations in Pakistan and progress on safe passage will determine the next steps. Markets remain sensitive while verification and repairs proceed.