Oil prices climbed back toward $100 a barrel on Thursday as the Strait of Hormuz remained largely shut to commercial shipping, and fresh Israeli strikes on Lebanon cast serious doubt over the fragile ceasefire announced less than 48 hours ago.
West Texas Intermediate (WTI) for May briefly climbed above $100 a barrel, while Brent crude moved toward $99, reversing part of the historic plunge of more than 13 percent recorded on Wednesday.
The rebound came as vessel traffic through the Strait of Hormuz stayed negligible on Thursday, with MarineTraffic data showing large clusters of ships still anchored in the Persian Gulf. Only a handful of vessels, including a tanker and several dry bulk carriers, have been allowed to pass through the critical waterway since the ceasefire was declared.
With more than 1,000 ocean-going vessels trapped within the Persian Gulf, analysts say it would likely take more than two weeks to clear the backlog even under normal conditions. According to Daejin Lee, global head of research at Fertmax FZCO, the 14-day ceasefire window is simply too short to restore the level of confidence needed to fully unwind the uncertainty premium in markets.
A deeper dispute also threatens to unravel the deal before peace talks in Islamabad even begin. Iran’s Foreign Minister Abbas Araghchi said the ceasefire must include a halt to Israel’s conflict with Hezbollah in Lebanon, while the White House maintained that Lebanon is not part of the agreement. The US and Iran are heading into weekend talks in Pakistan working from two separate documents: Iran’s 10-point plan and Washington’s 15-point framework, with the gap between them described as significant.
Beyond the political uncertainty, analysts warn that even a genuine truce will not produce an immediate resumption of large-scale oil flows. Joe Brusuelas, chief economist at RSM US, said confidence-building measures in the coming days are critical, adding that war-risk insurance for tankers will need to be re-established before major shipping companies commit vessels to the route. Gulf oil producers, who cut output by millions of barrels per day during the conflict, also face a complex restart process, with Brusuelas estimating it could take three to six months to fully recover to pre-war production levels.
Energy and commodity markets are likely to remain on a structurally elevated floor regardless of the ceasefire outcome, according to analysts at BCA Research, as governments worldwide continue to hoard and restock supplies in anticipation of renewed conflict.
US and Iranian delegations are expected in Islamabad on Saturday for talks that will determine whether the truce can be converted into a durable end to a conflict that has killed thousands and triggered what energy watchdogs describe as the largest disruption to global oil supply in history.
