Toye Faleye with Agency report
Oil prices climbed Thursday as investors remained cautious that Middle East crude supplies may not fully resume, despite a two-week ceasefire between the United States and Iran. Lingering uncertainty reflects concerns over the truce’s stability and ongoing restrictions in the Strait of Hormuz, a key global oil route.
Brent crude futures rose $2.60, or 2.74%, to $97.35 a barrel at 0048 GMT, while U.S. West Texas Intermediate (WTI) gained $3.02, or 3.2%, to $97.43. These gains followed both benchmarks falling below $100 in the previous session, with WTI posting its biggest drop since April 2020 on expectations that the ceasefire would reopen the Strait of Hormuz.
The waterway, carrying 20% of global oil from Iraq, Saudi Arabia, Kuwait, and Qatar, remains tightly controlled. Analysts warn transit depends on Iran, with logistics, insurance costs, and security risks restricting new flows.
Tensions in the region continue to erode confidence in the ceasefire. For example, Israeli strikes in Lebanon on Wednesday led Iran to question peace talks. As a result, shippers said they need clearer terms before resuming operations through the Strait, even as Iran issued maps and marked safe passages with its Revolutionary Guards.
Alongside restricted shipping, regional energy infrastructure remains vulnerable. Industry sources reported that Iran struck a Saudi pipeline bypassing the Strait, while Kuwait, Bahrain, and the UAE confirmed missile and drone attacks.
Analysts at Standard Chartered noted that “transit through the Strait of Hormuz remains risky,” adding that operational limits mean little extra energy will flow in the next two weeks. Similarly, Haitong Futures echoed these concerns, citing ongoing Israeli strikes on Hezbollah in Lebanon and continued attacks on Middle Eastern energy facilities.