Oil prices increased by 3% on Thursday due to persistent concerns about the fragile two-week ceasefire in the Middle East, which has left energy flows through the critical Strait of Hormuz restricted. At 1055 GMT, Brent crude futures rose by $2.69, or 3.1%, reaching $97.71 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $2.99, or 3.2%, to $97.40 per barrel.
Both benchmarks had dropped below $100 per barrel during the previous trading session, with WTI experiencing its largest decline since April 2020. This fall was driven by optimism that the ceasefire would lead to the reopening of the strait. However, analysts remain cautious, noting that market participants are reluctant to fully discount the geopolitical risk premium amid uncertainty about the impact of ongoing U.S.-Iran negotiations on oil shipments.
Vandana Hari, founder of oil market analysis firm Vanda Insights, remarked that the likelihood of a significant reopening of the strait in the near term appears slim, forecasting continued price volatility. She added that the futures market seems somewhat disjointed, as prices would typically have rebounded to pre-ceasefire levels by now.
The Strait of Hormuz is a vital maritime passage connecting oil supplies from Gulf producers including Iraq, Saudi Arabia, Kuwait, and Qatar to global markets. It usually handles about 20% of the world’s oil and gas exports.
Susannah Streeter, chief investment strategist at Wealth Club, emphasized that even if shipments resume, risks will persist. Tankers may still face mined waters and increased military activity, which will keep insurance premiums and freight costs elevated.
Meanwhile, the ceasefire’s durability remains uncertain amid ongoing Israeli strikes on Lebanon, prompting Iran to describe further peace talks as “unreasonable.” Shipping companies have indicated they require clear terms of the ceasefire before resuming transit through the Strait of Hormuz. Iranian media reported that Iran has issued navigational maps to help vessels avoid mines and identify safe routes.
In the meantime, commodities trader Glencore and Taiwan’s state refiner CPC have each chartered tankers to transport Middle Eastern crude to Asia, while other vessels in the Gulf are preparing to exit via the strait. An oil industry source noted that regional oil infrastructure continues to face threats. Additionally, Kuwait, Bahrain, and the UAE have reported missile and drone attacks attributed to Iran.
In a significant development, Goldman Sachs has lowered its second-quarter 2026 price forecasts for Brent and U.S. crude to $90 and $87 per barrel, respectively, following the ceasefire. Previously, the bank had projected average prices of $99 for Brent and $91 for WTI during the same period.
