The recent agreement between the United States and Iran to end the 3-1/2 month-old war is not expected to immediately lower energy prices, according to market participants and economists. Despite the peace framework announced by US President Donald Trump, commodity prices are forecast to remain higher than their February levels, prior to the US and Israel's attack on Iran, as risk premiums built into energy prices during the conflict will take months to unwind [1].
Economists warn that inflation across Asian economies, particularly those heavily reliant on imported commodities such as Japan, South Korea, and China, will persist for months. The normalization of energy markets is expected to be gradual, with analysts suggesting that the risk premium on crude oil may take half a year or more to dissipate. Until then, Asian importers will continue to face higher costs, and consumers will experience elevated inflation [1].
Traders are closely monitoring crude oil futures, with technical indicators pointing to continued volatility and prices likely to stay above pre-war levels for an extended period. The consensus among analysts is that price relief will be slow, especially if supply disruptions from the war are not quickly resolved. Market sentiment remains cautious, with many investors maintaining hedges against further price spikes. While the agreement has brought some stabilization, a full recovery of energy markets is anticipated to be a multi-month process requiring ongoing attention to geopolitical developments and commodity flows [1].
CONCLUSION
The US-Iran peace deal marks a significant step toward stability, but energy prices are expected to remain elevated for months as markets gradually adjust. Asian economies and consumers will continue to face inflationary pressures until risk premiums subside and supply chains normalize. Market participants remain cautious, anticipating a slow and volatile recovery.