Oil prices climbed sharply on Thursday as fresh doubts clouded a tenuous two-week ceasefire in the Middle East, stoking investor anxiety that energy shipments through the vital Strait of Hormuz could remain throttled for weeks or longer.
Brent crude futures, the global benchmark, jumped $2.18, or 2.3 percent, to $96.93 a barrel by 0645 GMT. U.S. West Texas Intermediate crude rose even more steeply, gaining $3, or 3.18 percent, to $97.41 a barrel.
The rebound erased much of the previous session’s sharp losses, when both contracts had tumbled below the psychologically important $100-a-barrel level for the first time in months. WTI posted its steepest single-day decline since April 2020 amid early hopes that the ceasefire would quickly reopen the strait.
Those hopes have now evaporated. Market participants, once optimistic that diplomacy between Washington and Tehran might restore normal tanker traffic, are reluctant to price out the geopolitical risk premium entirely. “The chances of a meaningful reopening of the Strait of Hormuz any time soon look dim,” said Vandana Hari, founder of Singapore-based oil market analysis firm Vanda Insights. “The futures market looks a bit broken. Otherwise, prices should have snapped right back to pre-ceasefire levels by now.”
The narrow waterway at the mouth of the Persian Gulf is the world’s most critical energy chokepoint, funneling roughly one-fifth of global oil and liquefied natural gas supplies. It serves as the primary export route for crude from major producers including Iraq, Saudi Arabia, Kuwait and Qatar. Any sustained restriction there sends ripples through refineries from Asia to Europe and the United States.
The ceasefire’s durability is already in serious question. On Wednesday, Israel pressed ahead with strikes inside Lebanon, prompting Iran to declare it would be “unreasonable” to continue negotiations aimed at forging a permanent peace agreement. Ship operators, wary of the volatile environment, told Reuters they require far greater clarity on ceasefire terms before resuming full transits.
Iranian state media reported that Tehran has distributed nautical charts designating safe corridors around newly laid mines and has coordinated passage protocols with the Revolutionary Guards. Yet few vessels appear ready to test those routes.
Analysts at Standard Chartered painted a bleak near-term picture in a note to clients. “Logistic disconnects, security fears, elevated insurance premiums and operational constraints mean that very little additional energy is likely to be supplied via the Strait of Hormuz in the next two weeks,” they wrote.
Compounding the unease, regional oil infrastructure remains squarely in the crosshairs. Iran carried out retaliatory strikes on facilities in neighboring countries after the ceasefire took effect, including a key Saudi pipeline that had been used as an alternative bypass route around the blocked strait, according to an industry source familiar with the matter. Kuwait, Bahrain and the United Arab Emirates all reported incoming missile and drone attacks in the same period.
Wall Street’s biggest banks are already dialing back their forecasts. Goldman Sachs trimmed its second-quarter 2026 projections for Brent to $90 a barrel and for U.S. crude to $87 a barrel, citing the ceasefire’s apparent fragility even as it acknowledged some potential for diplomatic progress.
For now, the market’s message is clear: while the guns may have quieted momentarily, the risk of fresh disruption in the world’s most important oil artery has not gone away.
Traders will be watching every diplomatic signal out of Washington, Tehran and Jerusalem — and every tanker movement in the Gulf — for the next clue to where prices are truly headed.
WHAT YOU SHOULD KNOW
Oil prices rebounded sharply on Thursday, with Brent rising 2.3% to $96.93 and WTI climbing 3.18% to $97.41, as fragile ceasefire doubts in the Middle East raised fears that energy flows through the critical Strait of Hormuz could stay restricted for weeks.
A meaningful reopening of the Strait of Hormuz — which carries about 20% of global oil and gas supply — looks highly unlikely in the near term due to ongoing attacks, security fears, logistical issues, and unclear U.S.-Iran negotiations, keeping geopolitical risk premium firmly in oil prices and ensuring continued volatility.
