Oil Prices Still Higher than Pre-Iran War Levels Amid Uncertainty About Ceasefire, Commerzbank Says

Though the markets responded with relief to the U.S. and Iran's ceasefire announcement, prices remain significantly higher than before the outbreak of the war amid ongoing uncertainty about whether the ceasefire will be honored, Commerzbank said in a Wednesday note.During the two-week ceasefire, further negotiations are set to take place. However, it remains unclear how involved Israel was in the agreement and to what extent its role may influence compliance, the bank noted.The 10-point plan that forms the basis of upcoming peace talks includes demands likely to be unacceptable to the U.S., including lifting of all sanctions, withdrawal of U.S. military forces from the Middle East and continued Iranian control over the Strait of Hormuz, the bank said.There is also uncertainty about how quickly maritime traffic through the strait can be restored, Commerzbank said.International Energy Agency Executive Director Fatih Birol said significant damage to the region's energy infrastructure speaks against a rapid normalization of supply. Experts estimate reconstruction costs to be about US$25 billion.

-- Though the markets responded with relief to the U.S. and Iran's ceasefire announcement, prices remain significantly higher than before the outbreak of the war amid ongoing uncertainty about whether the ceasefire will be honored, Commerzbank said in a Wednesday note.

During the two-week ceasefire, further negotiations are set to take place. However, it remains unclear how involved Israel was in the agreement and to what extent its role may influence compliance, the bank noted.

The 10-point plan that forms the basis of upcoming peace talks includes demands likely to be unacceptable to the U.S., including lifting of all sanctions, withdrawal of U.S. military forces from the Middle East and continued Iranian control over the Strait of Hormuz, the bank said.

There is also uncertainty about how quickly maritime traffic through the strait can be restored, Commerzbank said.

International Energy Agency Executive Director Fatih Birol said significant damage to the region's energy infrastructure speaks against a rapid normalization of supply. Experts estimate reconstruction costs to be about US$25 billion.