Oil prices plummeted on Friday, closing out their steepest weekly decline since early April as traders awaited word of a US-Iran ceasefire agreement.
Traders are eagerly awaiting news of the deal, which could open up the Strait of Hormuz, a crucial waterway used to transit one-fifth of the world's oil and gas supply.
The market is expecting a significant relief if the strait reopens, but analysts warn that a recovery may still be uncertain.
Commerzbank has raised its Brent forecasts to $90 a barrel by the end of September, based on a scenario in which the strait remains closed for another two months.
The US and Iran have reached a tentative agreement to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters.
However, the characterizations of the deal between the two sides are still somewhat different, with Iran suggesting it would regulate traffic through the strait.
The closure of the waterway has driven energy prices sharply higher worldwide, with recent sessions being volatile and swings by as much as $6 for both benchmarks.
Analysts at ING say that a reopening of the waterway would offer some immediate relief to the oil market, but a recovery is still uncertain.
Japan's reliance on oil from the Middle East has been severely impacted by the conflict, with crude oil imports dropping by 66% last month compared to April last year.
The market is cautiously optimistic about the potential deal, but prices may take time to adjust.
