Oil Prices Rise as US-Iran Ceasefire Faces Challenges
Global oil prices increased in Asian morning trading on Thursday as investors monitored the fragile ceasefire between the US and Iran.
The conditional two-week ceasefire has come under strain following a series of deadly Israeli strikes on Lebanon, which led Tehran to issue a warning of a
"regret‑inducing response"should the attacks persist.
Oil prices had sharply declined on Wednesday after the announcement of the ceasefire agreement, which included provisions for reopening the strategically important Strait of Hormuz.
Strait of Hormuz Shipping Route Remains Disrupted
The Strait of Hormuz, a critical shipping passage, has experienced severe disruptions after Iran threatened to target vessels attempting to cross without permission, in retaliation for US-Israeli airstrikes on Iranian targets.
As of Thursday, the global benchmark Brent crude rose by 3.3% to $97.90 (£73.11), while the US-traded West Texas Intermediate increased by 3.2% to $97.55. Despite these fluctuations, oil prices remain significantly elevated compared to levels prior to the conflict's onset on 28 February.
Details of the Ceasefire Agreement and Shipping Impact
The ceasefire was announced late Tuesday evening Washington time, just before the 20:00 EDT (00:00 GMT Wednesday) deadline set by US President Donald Trump. The President had warned that
"a whole civilisation will die tonight"if an agreement was not reached.
A key condition of the ceasefire was the safe passage of ships through the Strait of Hormuz. However, Iran's navy has issued warnings that any vessels attempting to transit the strait without authorization
"will be targeted and destroyed", according to shipping brokerage firm SSY, which confirmed this information to BBC Verify.
Since the ceasefire announcement, only a limited number of ships have crossed the waterway, far fewer than the approximately 130 vessels that typically transit daily before the conflict. Maritime tracking firm Pole Star Global estimates that it will take at least 10 days to clear the backlog of vessels currently waiting, even if shipping volumes return to normal levels.
Continued Conflict and Disputes Over Ceasefire Scope
There remains disagreement regarding whether Lebanon is included in the ceasefire terms. On Wednesday, Israel conducted its heaviest bombardment of Lebanon during this conflict, resulting in at least 182 fatalities.
In response, Hezbollah, the Iran-backed militia, stated on social media that it had launched rocket attacks on northern Israel, citing violations of the ceasefire as justification.
Upcoming Negotiations
US Vice President JD Vance is scheduled to participate in negotiations with Iranian representatives in Pakistan on Saturday, aiming to address ongoing tensions and the ceasefire's implementation.
