Peace is great. Cheap energy would be better. ECB Executive Board member Isabel Schnabel made clear on June 25 that while ceasefire efforts in the Middle East have pushed energy prices down, they haven’t come close to restoring the pre-conflict status quo.
The ceasefire discount isn’t enough
A US-Iran ceasefire struck in mid-to-late June 2026 triggered a sharp decline in oil prices. But Schnabel was quick to pour cold water on the celebration, noting that energy prices remain “measurably higher than before the war.”
The reasons are structural, not sentimental. Damaged infrastructure across conflict zones doesn’t rebuild overnight. Insurance costs for shipping through contested waters have ballooned. Strategic reserves that were depleted during the conflict need to be replenished, which itself creates demand pressure.
Schnabel pointed specifically to medium-term energy futures as evidence. Contracts for deliveries months and years out remain elevated, signaling that traders don’t expect a return to pre-war pricing anytime soon.
