WTI Crude Falls 15 Percent to $95.85, Brent Drops to $96.24 as US-Iran Ceasefire Collapses Hormuz War Premium

Global oil prices collapsed on April 8, 2026, with West Texas Intermediate crude falling approximately 15 percent from $112.95 to $95.85 per barrel and Brent dropping to $96.24 after the United States and Iran announced a two-week conditional ceasefire contingent on the reopening of the Strait of Hormuz. The price crash, one of the largest single-day declines in years, reflected the rapid unwinding of a war premium that had built over six weeks of supply disruption.

The ceasefire announcement followed President Trump receiving a 10-point Iranian proposal on April 7. Trump confirmed the conditional framework on the morning of April 8, sending crude futures sharply lower as traders moved to price out the geopolitical risk premium that had pushed Brent above $126 per barrel at its peak. Brent shed approximately 11.93 percent in a single session, with one early morning reading placing the front-month contract at $93.76 before a slight recovery.

Hormuz Blockade Had Removed 11 Million Barrels Per Day

The backdrop for today's price action is the most severe oil supply disruption since the 1970s energy crisis. The Strait of Hormuz effectively closed in mid-March 2026 after Iran's Islamic Revolutionary Guard Corps moved to restrict transit, cutting roughly 11 million barrels per day of crude production from global markets. Middle East Gulf export volumes fell from approximately 15 million to 7 million barrels per day, with refinery run cuts adding a further 3 million barrels per day to the shortfall.

As previously reported, OPEC+ had agreed in early March to boost collective output by 206,000 barrels per day starting April 2026, with Saudi Arabia adding 62,000 b/d, Russia adding 62,000 b/d, and Iraq contributing 26,000 b/d. The market had essentially dismissed that hike as irrelevant against an 11 million barrel per day supply hole, but the ceasefire now makes the additional barrels more meaningful as traders reassess the supply outlook. You can read more about the OPEC+ April 5 production meeting and compliance concerns here.

WCS Retreats From Century Mark, CAD Impact Softens

Western Canadian Select crude for May delivery at Hardisty, Alberta, had been trading at a $16.15 per barrel discount to WTI, and the benchmark had crossed above $100 per barrel for the first time since 2022 during the crisis. With WTI retreating sharply, WCS will follow lower, easing the tailwind for Alberta oil sands producers who had been benefiting from record-high prices but also facing new uncertainty around the pace of demand recovery if Middle East flows resume.

Canadian operators including Suncor Energy and Canadian Natural Resources had reported strong realizations in recent weeks as oil sands upgraders benefited from a synthetic crude premium over WTI driven by the European diesel shortage. That differential may narrow as Middle East production resumes and global refined product markets rebalance.

Asian LNG Prices Also Set to Fall Sharply

The ceasefire news simultaneously pressured Asian spot LNG prices, which were poised to fall roughly 17 percent to approximately $15 per MMBtu. Northeast Asia spot LNG had been trading at $18.75 per MMBtu heading into the week, while Southwest Europe spot LNG stood at $16.40 per MMBtu. A reopened Strait of Hormuz would allow Qatar to resume normal LNG exports, potentially ending force majeure declarations at Qatar's largest LNG export plant and restoring supply to customers in Taiwan and South Korea that had been scrambling for alternatives.

Market Caution Ahead of Ceasefire Confirmation

Analysts cautioned that the two-week conditional ceasefire leaves considerable uncertainty in the market. The Hormuz corridor handles approximately 20 percent of global oil trade on a normal day, and traders will be watching closely for Iranian compliance and US verification steps before fully pricing out the risk premium. Iraq, which had been granted Hormuz exemptions for its own crude exports, is also moving to resume normal volumes, adding further near-term supply to a market that had been severely undersupplied.

For Canadian producers, the ceasefire creates a two-sided scenario: lower oil prices reduce near-term revenue, but a stable global supply environment reduces the risk of demand destruction and supports longer-term capital allocation. The Trans Mountain pipeline expansion, now operating at full capacity, continues to give Alberta operators Pacific Basin access that reduces their exposure to North American price dislocations.

WTI at $95.85 and Brent at $96.24 still represent historically elevated prices that support strong cash generation for most oil sands operators. The previous article on Trump's Hormuz deadline and market reaction from April 7 provides context on the hours leading up to the ceasefire agreement.