Japan utilities & oil: Implications of US-Iran ceasefire

Research evidence excerpt

Japan utilities & oil: Implications of US-Iran ceasefire

Japan utilities & oil: Implications of US-Iran Global Markets Research

ceasefire 16 June 2026

EQUITY: JAPAN OIL PRODUCTS

We expect crude oil prices to fall towards normal Research Analysts

levels Japan utilities & oil Shinichi Yamazaki - NSC

shinichi.yamazaki.a3@nomura.com

Critical test of oil distributors’ ability to pass costs on +81 3 6703 1133

We expect WTI crude oil price to fall to around $70/bbl

On 15 June, Pakistan’s Prime Minister Shehbaz Sharif announced that the US and Iran

had reached an agreement to end hostilities, with a signing ceremony to be held in

Geneva on 19 June. However, given that Israel has ruled out a withdrawal from Lebanon,

we will have to monitor developments to see whether the agreement to end hostilities is

actually signed. Following this announcement, the WTI crude oil price trended around

$80/bbl, while crude oil futures prices for the December 2027 contract have been around

$70/bbl. If the signing ceremony is successfully held on 19 June and the Strait of Hormuz

is reopened, we expect prices to trade with $70/bbl as the lower bound, taking into

account current futures prices and supply-demand conditions.

Slightly negative for oil products and oil exploration/development sectors

A ceasefire agreement is somewhat negative for earnings at oil exploration/development

companies. We expect sales revenues to fall as a result of lower crude oil prices.

However, production volumes should recover as output at crude oil production facilities in

the Middle East returns to normal. We see a positive impact on earnings at Japan

Petroleum Exploration [1662] as the agreement should eliminate the need for alternative

LNG procurement.