Yes, a sharp rebound is possible, but it would depend on how the ceasefire fails and whether physical supply risk re-enters the market.

Base logic

Oil dropped because the geopolitical risk premium was removed. If talks collapse, that premium can return quickly.

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When a sharp rebound is likely

A strong upside move happens if:

Strait of Hormuz risk reappears (even partial disruption)

Sanctions tighten or enforcement increases

Military escalation targets energy infrastructure

👉 In such cases, oil can spike violently and fast because:

Supply routes are concentrated

Markets are currently underpricing disruption risk

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When rebound is limited

A weaker bounce occurs if:

Talks fail but no immediate escalation

OPEC+ increases supply to stabilise prices

Demand concerns (growth slowdown) dominate

👉 Then oil may rise, but more gradual and capped

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Key market dynamic now

You are seeing a shift from:

Fear-driven pricing → fundamentals-driven pricing

So any rebound must reintroduce real supply risk, not just headlines.

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Practical framing

Current drop = premium unwinding

Rebound requires = credible disruption risk

Without that → rallies likely sold

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Conclusion

Yes, oil can rebound sharply, but only if negotiations fail with escalation, not just failure alone. The market now needs tangible supply threat, not rhetoric, to reprice higher.