Oil prices surged again Thursday, hovering near $100 per barrel, as traders weighed the implications of a fragile U.S.–Iran ceasefire against ongoing disruptions in the Strait of Hormuz. The rise reflects investor concern over continued supply chain challenges and geopolitical risks.
Benchmark Brent crude rose 3.7% to $98.24 per barrel, while U.S. WTI crude jumped 6.8% to $100.79 per barrel, The Washington Post reported on Thursday.
The ceasefire theoretically includes provisions for reopening the Strait of Hormuz, a strategic waterway that channels nearly 20% of global oil and LNG exports. However, Business Insider noted that shipping traffic in the strait remains highly limited, with only a handful of tankers able to transit due to ongoing security concerns.
Officials in Abu Dhabi warned that the Strait of Hormuz is "not open" despite the ceasefire, according to The Guardian, highlighting that the physical flow of oil remains constrained. Analysts have said that this has sustained risk premiums in oil prices, as traders continue to factor in potential delays and regional instability, CNBC reported.
Stock markets reacted cautiously to the mixed signals. The S&P 500 slipped 0.1%, the Dow Jones fell 40 points, and the Nasdaq composite lost 0.2%, according to the Washington Post. Investors remain concerned that even a formal ceasefire may not prevent further disruptions in oil exports from the Gulf.
Supply chain issues persist across the region. Companies in the Gulf have reduced production volumes, and global inventories remain tight. Financial strategists have said that high crude prices could continue to fuel inflationary pressures, complicating central bank policies, CNBC noted.
In addition, analysts noted that even if the Strait of Hormuz reopens fully, it could take weeks for oil flows to normalize due to insurance and logistical hurdles, according to Business Insider.
Meanwhile, Goldman Sachs has lowered its second-quarter oil forecast while maintaining caution over potential upside risks if the waterway remains partially blocked, Reuters reported.
