Oil prices rise as investors eye fragile US-Iran ceasefire

Oil prices rise as investors eye fragile US-Iran ceasefire

Thursday’s Asian trading session saw a surge in global oil prices, driven by market speculation around the uncertain status of the US-Iran ceasefire. The agreement, which had already seen a sharp decline on Wednesday, now faces renewed scrutiny as tensions persist in the Middle East.

Wednesday’s market reaction had been marked by a steep drop in oil prices, following the announcement of a two-week conditional ceasefire. However, the fragile pact is now under pressure after Israel escalated its military campaign in Lebanon, prompting Iran to signal potential escalation if the conflict continues.

“We are prepared for a regret-inducing response,” warned Tehran, highlighting the risk of renewed hostilities over the critical Strait of Hormuz.

Iran’s threats to target vessels navigating the strait have caused significant disruptions to maritime traffic. The key waterway, vital for global oil shipments, has become a focal point of geopolitical risk, with the US and Israel’s recent airstrikes on Iranian targets fueling concerns.

Despite the recent volatility, Brent crude prices climbed to $97.90, up 3.3%, while West Texas Intermediate rose to $97.55, a 3.2% increase. Both benchmarks remain elevated compared to levels prior to the war’s outbreak on 28 February.