By Benadeta Mwaura - Reporter
Kenya, April 8, 2026 - Global oil prices pulled back sharply after the announcement of a temporary ceasefire involving Iran and the United States, easing fears of immediate supply disruption in one of the world’s most critical energy corridors.
U.S. crude futures fell to around $100.90 per barrel, retreating from recent highs that had pushed prices closer to the $120 mark at the peak of tensions. The decline followed the announcement by Donald Trump of a two-week ceasefire aimed at opening the door for negotiations.
The price movement reflects how sensitive oil markets have become to geopolitical signals, particularly those tied to the Middle East.
In recent weeks, oil prices had surged on fears that conflict could disrupt flows through the Strait of Hormuz, a narrow shipping lane that carries roughly a fifth of the world’s oil supply.
Any threat to this route immediately triggers panic in global markets.
The ceasefire, even though temporary, has reduced the immediate risk of supply disruption. Traders are now pricing in the possibility that oil will continue flowing, at least in the short term.
But the drop in prices does not signal stability.
It signals relief.
Despite the decline, oil remains elevated compared to earlier levels this year.
This is because the underlying risks have not disappeared.
The ceasefire is limited to just two weeks, tensions in the region remain unresolved, and broader geopolitical dynamics continue to evolve.
Markets are therefore caught between two forces: the hope of de-escalation and the fear of renewed conflict.
Oil prices are a key driver of global inflation and economic stability.
When prices rise, transport costs increase, food prices often follow, and business operating costs go up
When they fall, even slightly, it offers temporary relief, but not necessarily long-term certainty.
For import-dependent economies, the stakes are even higher.
More from Kenya
For countries like Kenya, the easing of oil prices could help stabilise fuel costs, at least in the short term.
Lower global prices may reduce pressure on, pump prices, nflation and foreign exchange reserves. However, the impact may not be immediate or sustained.
Kenya’s fuel pricing is influenced not just by global oil prices, but also by exchange rates, taxes and supply chain dynamics. With the Kenyan shilling still under pressure, any gains from falling oil prices could be partially offset.
Analysts caution that the current market reaction is based on expectations rather than certainty.
If negotiations fail or tensions escalate again, oil prices could quickly reverse course and climb back toward recent highs.
This creates a volatile environment where prices can shift rapidly in response to political developments.
What the latest price movement highlights is a deeper shift in the oil market.
Energy prices are no longer driven solely by supply and demand fundamentals, they are increasingly shaped by geopolitics.
The Middle East remains central to that equation.
The drop in oil prices offers a moment of relief, but not reassurance.
The ceasefire has calmed markets, but only temporarily, the risks remain, and the next move will depend not on supply alone, but on diplomacy.
For now, the oil market is not stable, it is simply waiting.