Hormuz Ceasefire Sends Oil Crashing Below USD 100 — Portugal’s Fuel Crisis May Finally Be Easing

A two-week ceasefire between the United States and Iran, announced late on April 7, sent oil prices into freefall overnight — with Brent crude plunging more than 15 per cent to below USD 100 per barrel in the steepest single-day drop since the 1991 Gulf War. The deal includes Iran’s agreement to guarantee safe passage through the Strait of Hormuz, the chokepoint through which roughly one-fifth of the world’s oil supply passes.

For Portugal, which has endured six weeks of fuel price records, emergency tax cuts, and a EUR 600 million business support package since the conflict began in late February, the ceasefire offers the first tangible hope of relief.

The deal in brief

The agreement was reached less than two hours before a deadline set by President Trump, who had threatened to strike Iranian power plants and infrastructure if the strait was not reopened. Under the terms, Iran will allow “safe passage” for commercial shipping through Hormuz for two weeks while formal negotiations begin on Friday. West Texas Intermediate crude fell more than 16 per cent to USD 94.47 per barrel, while Brent slid to USD 92.21 — levels not seen since early March.

Implications for Portuguese fuel prices

Portuguese diesel crossed the EUR 2 per litre mark for the first time last week, and petrol has hovered near EUR 2.10. The government has responded with an expanding ISP tax discount — currently 4.58 euro cents per litre for petrol and 8.34 cents for diesel — plus the EUR 600 million “Portugal Energy Resilience” credit line for energy-intensive businesses.

If the ceasefire holds and Brent stabilises around USD 90–95, economists estimate that pump prices could drop by 10 to 15 cents per litre within two to three weeks as the wholesale market adjusts. That would bring diesel back below EUR 1.90 and ease the acute margin pressure on transport, agriculture, and food processing sectors that have dominated headlines since March.

Caution warranted

Analysts caution that two weeks is a short window. The underlying conflict between the US-Israel coalition and Iran has not been resolved, and the ceasefire is explicitly temporary. Markets are pricing in the possibility that hostilities resume once the truce expires, which would send prices surging again.

“The risk premium has fallen, not disappeared,” noted Filipe Garcia, president of IMF – Informação de Mercados Financeiros, in comments to ECO. The conflict has already pushed Portugal’s 10-year bond yields to 3.53 per cent — their highest level in a regular auction in 12 years — and reshaped inflation expectations across the eurozone. Even a partial de-escalation does not unwind those structural shifts overnight.

The broader economic picture

The Bank of Portugal cut its 2026 GDP growth forecast to 1.8 per cent earlier this month, citing the energy shock. Business confidence has fallen to the lowest in Europe, with nearly one in four firms expecting revenue to decline. The ceasefire, if it holds and leads to a durable settlement, could reverse some of that pessimism — but the economy has already absorbed six weeks of damage that higher fuel costs, tighter financial conditions, and policy uncertainty have collectively inflicted.

For now, the country watches and waits. Friday’s negotiations between Washington and Tehran will set the tone.