Oil prices rise as investors eye fragile US-Iran ceasefire

Market reactions follow tensions over regional conflict

Thursday saw an increase in global oil prices during early Asian trading sessions, driven by renewed attention on the precarious US-Iran ceasefire. The agreement, which holds for two weeks, faced scrutiny after Israel escalated its strikes in Lebanon, raising concerns about potential escalation. Tehran issued a warning, stating it would retaliate with a “regret-inducing response” if attacks persisted.

Wednesday’s oil price decline was linked to the announcement of the ceasefire, which included measures to reopen the vital Strait of Hormuz. However, Iran’s threat to disrupt traffic through the waterway has caused uncertainty. The strait, critical for global shipping, has seen reduced activity as Iran prepared to target vessels crossing it in response to US-Israeli airstrikes.

Investors remained cautious, with Brent crude climbing 3.3% to $97.90, and West Texas Intermediate rising 3.2% to $97.55. Despite the recent fluctuations, prices remain elevated compared to pre-war levels, which began on 28 February. The situation highlights ongoing volatility in energy markets amid geopolitical risks.

“A regret-inducing response” is imminent if the attacks continue, Tehran warned.