Oil prices rise as traders eye fragile US-Iran ceasefire
Oil prices rise as traders eye fragile US-Iran ceasefire
Thursday’s Asian morning trade saw a surge in global oil prices, driven by cautious investor attention toward the tenuous US-Iran ceasefire. The agreement, which includes the reopening of the vital Strait of Hormuz, faced scrutiny after Israel’s recent strikes on Lebanon intensified tensions. Tehran issued a warning of a “regret-inducing response” if the attacks persist, testing the two-week conditional ceasefire.
Strait of Hormuz Disruptions
Oil prices dropped sharply on Wednesday following the announcement of the deal, which aimed to restore traffic through the critical waterway. Iran had previously threatened to target vessels crossing the strait in retaliation against US-Israeli airstrikes. The disruption in shipping highlighted the fragility of the agreement, with only a few ships navigating the route since its resumption.
“Ships seeking to cross the Strait of Hormuz without permission will be targeted and destroyed,” confirmed SSY, a shipping brokerage firm, to BBC Verify.
Current Price Trends
Despite the volatility, global benchmarks remain elevated. Brent crude climbed 3.3% to $97.90, while West Texas Intermediate increased by 3.2% to $97.55. Prices are still significantly higher than pre-war levels, with the conflict beginning on 28 February.
Ceasefire Agreement Timeline
The ceasefire was announced on Tuesday evening Washington time, just before a deadline set by US President Donald Trump. His warning that “a whole civilisation will die tonight” if no deal was reached underscored the urgency of the agreement. A key condition was ensuring safe passage for ships through the Strait of Hormuz.
Ships’ Safety Concerns
Maritime tracking firm Pole Star Global estimates it will take at least 10 days to clear the backlog of vessels, even if the strait returns to its usual shipping volume. The low traffic rate—far below the 130 vessels that transited daily before the war—reflects lingering uncertainty.
Lebanon’s Role in Ceasefire
Disputes over Lebanon’s inclusion in the ceasefire added to the complexity. On Wednesday, Israel launched its heaviest bombardment of the country in this conflict, killing at least 182 people. In response, Hezbollah fired rockets at northern Israel, claiming the action was a reaction to ceasefire violations.
US Vice President JD Vance is set to engage in negotiations with Iran in Pakistan on Saturday, aiming to solidify the agreement amid ongoing regional tensions.
