Quick overview

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Oil recovered from its largest one-day decline since April 2020, with the Strait of Hormuz still mostly blocked and Israeli attacks on Lebanon threatening to sabotage the precarious Middle East ceasefire. After falling 13% on Wednesday, Brent increased toward $97 per barrel. Additionally, West Texas Intermediate was close to $97.

Tanker traffic through the strait was reportedly stopped following Israeli strikes, according to Iran’s semi-official Fars news agency. US Vice President JD Vance refuted this claim, stating that “we are seeing signs that the straits are starting to reopen.”

Two fully loaded Chinese oil tankers in the Persian Gulf were headed toward the strait on Thursday, possibly making them the first of their kind to cross since the ceasefire was declared. There is no guarantee of a successful passage, and traffic hasn’t changed much in the last day.

De-escalation negotiations between the US and Iran served as the impetus for the demonstration. Citing what he called a “workable” proposal from Tehran to resume talks, Trump declared late on Tuesday that Washington would halt strikes on Iran.

The reopening of the Strait of Hormuz, a crucial international oil shipping route that has been closed for weeks due to the fighting, is a crucial requirement for the tentative ceasefire.

Iranian officials first indicated that they would be open to temporarily reopening the passage if hostilities stopped. However, Iran’s parliamentary speaker, Israel has already violated the ceasefire by attacking Lebanon, which is why the waterway is still closed.

Brent and West Texas Intermediate crude futures increased by 2.5 percent and 2.8 percent, respectively, following the news of the strait’s blockage. This comes after oil fell below $100 per barrel on Wednesday, resulting in drops of more than 13%.