Oil prices rise as traders eye fragile US-Iran ceasefire
Oil prices rise as traders eye fragile US-Iran ceasefire
Global oil prices climbed during early Asian trading sessions on Thursday, driven by heightened attention to the precarious US-Iran ceasefire. The agreement, which includes the reopening of the Strait of Hormuz, faced scrutiny after Israel intensified its strikes on Lebanon, leading Tehran to issue warnings about potential retaliation.
Prices fell sharply on Wednesday following the agreement’s announcement, as concerns over the strait’s security lingered. Iran had previously blocked traffic through the vital shipping route, threatening to attack vessels crossing without permission in response to US-Israeli airstrikes. The situation remained volatile, with traders closely monitoring developments.
“A whole civilisation will die tonight,” US President Donald Trump warned before the ceasefire’s deadline. The deal, announced on Tuesday evening Washington time, aimed to stabilize the region amid escalating tensions.
Despite the agreement, shipping through the Strait of Hormuz has seen limited activity. Only a few vessels have transited the waterway since the deal was finalized, far below the usual daily rate of around 130 ships. Maritime tracking firm Pole Star Global estimates it will take at least 10 days to resolve the backlog, even if traffic returns to normal.
Disputes over the ceasefire’s scope persist, particularly regarding Lebanon’s inclusion. On Wednesday, Israel launched its most intense bombing campaign of the conflict, killing at least 182 people. In response, Hezbollah fired rockets at northern Israel, claiming the actions were a reaction to ceasefire breaches.
US Vice President JD Vance is set to engage in talks with Iranian representatives in Pakistan on Saturday, seeking to solidify the fragile accord. The ongoing negotiations underscore the delicate balance between regional stability and global energy markets.
Global benchmark Brent crude increased by 3.3% to $97.90, while US-traded West Texas Intermediate rose 3.2% to $97.55. Both prices remain significantly elevated compared to levels before the war began on 28 February.
Iran’s navy has confirmed warnings to ships in the Gulf, stating that vessels crossing the Strait of Hormuz without approval will face attacks. This uncertainty continues to influence market sentiment, with traders bracing for further volatility.