US-Iran deal leaves $5-10 oil premium intact; Hormuz flows seen at 10 mbpd by January

While the consultancy has raised the probability of a “narrow deal” to 55% from 40%, making it the most likely outcome, it cautioned that the agreement merely shifts markets from acute disruption risk to managed geopolitical risk.

Under base-case scenario, Iranian sanctions would be gradually eased and flows through the Strait of Hormuz would recover to around 10 million barrels per day (bpd) by January, but uncertainty surrounding Iran’s nuclear programme and the long-term status of the Strait is expected to keep oil markets volatile.

“The US-Iran MOU is an important de-escalation, but it is not a resolution, and markets should not price it as one,” said Jorge Leon, Head of Geopolitical Analysis at Rystad Energy.

“Both sides had clear incentives to step back from open confrontation. What they produced is an agreement that serves those immediate interests while leaving the hardest questions, Iran’s nuclear program and the long-term status of the Strait of Hormuz, to a 60-day negotiating window that will be anything but straightforward,” Leon said.

What do analysts at Rystad say?

According to Rystad, the probability distribution is now concentrated around a managed de-escalation outcome — enough progress to avoid renewed fighting and restore a meaningful share of Hormuz traffic, but not enough trust or political compromise to fully remove the underlying geopolitical risk.

The consultancy said the narrow-deal scenario has become the most politically workable outcome because it allows the US to point to restored oil flows and lower disruption risks while enabling Iran to preserve leverage over the world’s most critical oil chokepoint.

“The risk of an immediate military breakdown has declined meaningfully and that is real. But the risk premium does not disappear with a signature; it just changes shape,” Leon said.

A full resolution remains a distant possibility. Rystad has lowered the probability of a comprehensive settlement to 10% from 25%. Such an outcome would require a breakthrough on the nuclear issue, lifting of sanctions and a durable reopening of Hormuz. In that scenario, flows could recover to around 14 million bpd by January, while most of the geopolitical risk premium would disappear.

However, Rystad said negotiating a credible nuclear agreement within the 60-day window remains highly challenging.

The consultancy continues to assign a 25% probability to a prolonged stalemate. Under this scenario, no comprehensive agreement is reached, but both sides avoid returning to open conflict. Hormuz flows would recover only partially to around 5 million bpd by late 2026, while another 5 million bpd would bypass the Strait. Sanctions would remain in place and oil markets would continue to carry a geopolitical risk premium of about $10 per barrel.

“In practical terms, a stalemate would mean that the crisis fades from the headlines without being resolved: enough stability to avoid panic pricing, but not enough certainty to remove the risk premium,” the consultancy said.

The downside scenario of renewed conflict now carries a 10% probability, down from 25% previously, following the signing of the MoU. If negotiations collapse and fighting resumes, flows through Hormuz would remain severely constrained and oil markets could face a geopolitical risk premium of $15-20 per barrel.

“The MOU therefore lowers the probability of an immediate oil shock, but it does not eliminate the risk premium. The market is likely to move from crisis pricing to negotiation pricing: less panic, but still far from where we were pre-conflict,” Leon said.

Rystad also cautioned that traffic recovery through Hormuz is likely to be gradual even under constructive scenarios, as shipowners, insurers and traders regain confidence, while logistical bottlenecks, security concerns and inventory replenishment continue to influence oil prices.