Oil prices increased on Thursday amid concerns about the stability of a two-week ceasefire in the Middle East, which could affect energy flows through the crucial Strait of Hormuz. Brent crude rose by $2.18 to $96.93 a barrel, while U.S. West Texas Intermediate (WTI) climbed $3 to $97.41 a barrel. Despite a previous drop below $100, analysts remain cautious about geopolitical risks and the potential impact of U.S.-Iran negotiations on oil supply.
Vandana Hari of Vanda Insights noted that the likelihood of a significant reopening of the Strait of Hormuz appears low, suggesting continued price volatility. The Strait is vital for transporting about 20% of global oil and gas, connecting Gulf producers to international markets. Ongoing Israeli attacks on Lebanon have further complicated ceasefire discussions, with Iran expressing skepticism about reaching a permanent peace deal.
Shippers are seeking clarity on ceasefire terms before resuming transit through the Strait, as logistical challenges and security concerns persist. Standard Chartered analysts predict limited energy supply from the Strait in the coming weeks due to heightened risks and operational constraints. Meanwhile, Goldman Sachs has revised its oil price forecasts downward for 2026, reflecting the uncertain market conditions.
