Ceasefire eases near-dated oil and gas risk premia, but supply disruption risks still skew higher

Overview

This report discusses the impact of the two-week US-Iran ceasefire, the reopening of the Strait of Hormuz, and the cessation of attacks on crude oil, European natural gas, and global LNG prices. Goldman Sachs believes the current news is broadly consistent with its base case: energy flows through the Strait of Hormuz start to recover this weekend, and Persian Gulf exports then gradually return to pre-war levels over about one month. As near-dated risk premia ease, the report lowers near-term Brent, WTI, and TTF forecasts, but medium-term oil price forecasts are largely unchanged.

Core views

The key view is that the ceasefire has eased the supply risk premium in spot oil and gas markets, but it has not eliminated upside tail risks. On crude oil, the 2026Q3/Q4 Brent and WTI forecasts are unchanged, while the 2026Q2 forecast is lowered; on natural gas, lower Chinese LNG demand and higher-than-expected European LNG imports lead to lower near-dated TTF forecasts, but if LNG recovery through the Strait of Hormuz is delayed or production infrastructure is damaged, European gas prices could still test levels above 75 EUR/MWh.

Analysis framework

The report uses a base-case versus adverse-case framework, incorporating the pace of the Strait of Hormuz reopening, the recovery of Persian Gulf exports, persistent Middle East production losses, LNG flow normalization, and demand destruction into price forecasts. Oil prices are presented as monthly averages of front-month futures, while gas forecasts compare spot, remaining second-quarter, second-half, and forward prices.

Methodology notes

• Scenario analysisStrait of Hormuz recovery path

  Base case and adverse case

  The base case assumes energy flows resume this weekend and Persian Gulf exports return to pre-war levels in about one month; the adverse case assumes the ceasefire does not hold and the Strait of Hormuz reopening is delayed by one month, while a severely adverse case also includes persistent 2mb/d Middle East production losses.

• Price forecasting conventionFront-month futures monthly average forecast

  Monthly average definition

  The report explains that a forecast for a given month is the average price of the front-month futures contract traded during that month; for example, the April 2026 Brent forecast corresponds to the monthly average price of the Brent June 2026 contract traded in April, and the WTI forecast corresponds to the May 2026 contract.

• Natural gas balancing frameworkTTF above coal power cost

  Demand and LNG flow constraint

  Under the base case in which LNG flows through the Strait of Hormuz gradually normalize from mid-April, Goldman Sachs expects TTF to need to stay above coal-fired power costs to balance the market this year within the 40-50 EUR/MWh range.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Brent

  Core crude oil price forecasting benchmark

  Strengths

  Medium-term forecasts are unchanged, and under the base case, gradually recovering supply flows support a decline from elevated risk premia.

  Weaknesses

  Lower near-dated risk premia have led to a cut in the 2026Q2 forecast.

  Comparison

  Compared with WTI, Brent more directly reflects global seaborne crude and Middle East supply risk.

  Risks

  If reopening of the Strait of Hormuz is delayed or Middle East production losses persist, the 2026Q4 average could rise to $100/bbl or $115/bbl.

• WTI

  U.S. crude oil price forecasting benchmark

  Strengths

  Medium-term forecasts are maintained in line with Brent, indicating that the base supply-demand path has not changed materially.

  Weaknesses

  Near-dated prices are also affected by lower risk premia, so the 2026Q2 forecast is cut.

  Comparison

  WTI forecasts remain below Brent, at $77/75/bbl for 2026Q3/Q4.

  Risks

  If global supply disruptions persist, WTI could still move higher with Brent.

• TTF

  European natural gas price forecasting benchmark

  Strengths

  As LNG flows gradually normalize and Chinese LNG demand remains weak, near-dated risk premia are falling.

  Weaknesses

  Prices still need to stay above coal-fired power costs to balance the market, making TTF highly sensitive to LNG flows.

  Comparison

  The 2H26 forecast of 42 EUR/MWh is slightly below the 46 EUR/MWh forward price.

  Risks

  If LNG recovery through the Strait of Hormuz is materially delayed or production infrastructure is damaged, TTF could test levels above 75 EUR/MWh.

• LNG

  Key variable linking Middle East shipping, European imports, and Asian demand

  Strengths

  The base case assumes LNG flows through the Strait of Hormuz gradually normalize from mid-April.

  Weaknesses

  Transportation corridor and infrastructure risks can quickly pass through to European gas prices.

  Comparison

  Weak Chinese LNG demand has lifted European LNG imports above prior expectations, easing near-dated TTF pressure.

  Risks

  A delay in corridor recovery or infrastructure damage would require broader demand destruction.

Key data

• Brent 2026Q3/Q4 forecast$82/80/bblUnchanged.
• WTI 2026Q3/Q4 forecast$77/75/bblUnchanged.
• Brent/WTI 2026Q2 forecast$90/87/bblSlightly lowered, reflecting lower near-dated risk premia.
• 2026Q4 Brent in the adverse case$100/bblAssumes the Strait of Hormuz reopening is delayed by one month, and Persian Gulf production eventually fully recovers.
• 2026Q4 Brent in the severely adverse case$115/bblAssumes the reopening is delayed and there is still a 2mb/d Middle East production loss afterward.
• prompt TTF45 EUR/MWhDown 10%.
• Bal 2Q26 TTF forecast50 EUR/MWhPreviously 70 EUR/MWh, due to lower Chinese LNG demand and European LNG imports above prior expectations.
• 2H26 TTF forecast42 EUR/MWhPreviously 43 EUR/MWh, slightly below the 46 EUR/MWh forward price.

Impact & implications

For investment implications, the ceasefire news has reduced the near-end risk premium on the oil and gas curve, leading to lower short-term price forecasts; however, because the ceasefire is fragile and the recovery of flows through the Strait of Hormuz still carries execution risk, energy assets retain upside tail risk. The main crude oil risks come from delayed recovery of Persian Gulf exports and Middle East production losses, while natural gas risks mainly come from disrupted LNG flows or damaged production infrastructure that would require stronger demand destruction in Europe.

Risks

• The ceasefire is described as fragile, and if the agreement does not hold, the recovery of energy flows may be delayed.
• If reopening of the Strait of Hormuz is delayed by one month, upside risk to crude oil prices increases significantly.
• If the Middle East suffers a persistent 2mb/d production loss, Brent could reach $115/bbl in a severely adverse case.
• Delayed LNG flow recovery or damage to production infrastructure could push TTF above 75 EUR/MWh.
• The report's forecasts are based on currently available public information, and prices and views may change as geopolitical and supply data evolve.

What to watch

• Whether the US-Iran ceasefire holds and whether it is extended after two weeks.
• The pace at which oil and gas transport volumes through the Strait of Hormuz recover.
• Whether Persian Gulf crude exports can return to pre-war levels in about one month.
• Whether Middle East crude production suffers any persistent loss.
• European LNG import volumes, Chinese LNG demand, and TTF relative to coal-fired power costs.
• Changes in the front-end risk premia on the Brent, WTI, and TTF forward curves.