Oil prices rose Thursday amid investor concerns that supply from the Middle East may not fully resume. Doubts persist about the U.S.-Iran ceasefire holding, and the vital Strait of Hormuz remains restricted.
Brent crude futures increased 2.74%, reaching $97.35 a barrel. U.S. West Texas Intermediate (WTI) crude gained 3.2%, trading at $97.43 a barrel.
Both benchmarks had previously fallen below $100 per barrel on expectations the ceasefire would reopen the Strait of Hormuz, a crucial waterway for about 20% of global oil supply.
However, the ceasefire's viability is questioned as Israel continued attacks on Lebanon, prompting Iran to suggest proceeding with peace talks would be "unreasonable." Shippers also require more clarity before resuming transit through the Strait.
Analysts note that transit through the Strait of Hormuz is not risk-free and remains at Iran's discretion. Logistical issues, security fears, and operational constraints mean little additional energy is likely to be supplied via the strait in the coming weeks.
Regional oil facilities also face threats, with Iran striking sites in nearby countries, including a Saudi Arabian pipeline designed to bypass the Strait of Hormuz.