Oil prices ease on ceasefire talks as global energy crisis deepens

Monday 06 April 2026 - 12:40

By: Dakir Madiha

Oil prices ease on ceasefire talks as global energy crisis deepens

The war in Iran has triggered a cascading energy crisis from Southeast Asia to Europe, with governments imposing fuel rationing, grounding aircraft, and shutting institutions as the closure of the Strait of Hormuz chokes off roughly one fifth of the world's oil and gas supply. Goldman Sachs has described the situation as the "worst oil crisis in history," while the International Energy Agency warned that April would see supply losses twice as severe as those recorded in March.

The physical price of Brent crude, the benchmark for actual oil cargo transactions, surged above $141 per barrel on April 2, its highest level since the 2008 financial crisis, according to S&P Global data reported by Bloomberg. Futures prices have oscillated between roughly $100 and $111 per barrel in recent days, shifting with alternating signals of escalation and early ceasefire talks.

The Philippines became the first country to formally declare a national energy emergency on March 25, when President Ferdinand Marcos Jr. signed Executive Order No. 110, warning of an "imminent danger of critical energy supply shortage." The country imports 98 percent of its oil from the Middle East and holds approximately 45 days of fuel reserves.

Indonesia imposed mandatory fuel purchase limits of 50 liters per vehicle per day, alongside remote work directives for civil servants, with exemptions for critical sectors such as health and food supply. Slovenia became the first European Union member state to introduce formal fuel rationing, capping private motorists at 50 liters per purchase period and businesses at 200 liters. Bangladesh closed universities, moved up school holidays, and implemented fuel rationing alongside increased scheduled power cuts.

Beyond formal rationing, Australian Prime Minister Anthony Albanese urged citizens to use public transport to preserve fuel for critical industries. South Korean President Lee Jae Myung implored citizens to "save every drop of fuel," while the government imposed fuel price caps and cut fuel taxes. Airlines across Europe and the Asia-Pacific region are canceling flights due to jet fuel shortages, with Ryanair CEO Michael O'Leary forecasting cancellations of 5 to 10 percent for the summer if the strait remains closed.

IEA Executive Director Fatih Birol said the current disruption has removed approximately 12 million barrels per day from the market, more than double the combined losses during the 1973 and 1979 oil shocks. "We are heading towards a major, major disruption, the biggest in history," he said, adding that energy rationing "could soon become a reality for many countries." Birol warned in a podcast reported by the Wall Street Journal and CNBC that "April will be much worse than March," as March still benefited from shipments already in transit before the war began.

On Monday, preliminary reports of a possible 45-day truce between the United States, Iran, and regional mediators offered a glimmer of hope, pulling oil futures modestly lower. But with the strait still effectively closed and Goldman Sachs forecasting that Middle East production losses could peak at 17 million barrels per day, the Carnegie Endowment for International Peace captured the prevailing mood: one fifth of the world's oil and natural gas trade remains blocked.