Oil prices surged on Thursday as doubts grew over the durability of the U.S.-Iran ceasefire, with key shipping routes in the Strait of Hormuz remaining restricted. The rebound followed a sharp decline on Wednesday after the ceasefire was announced, as traders reassessed the likelihood of a swift resumption of oil flows.
Part 1: Immediate Action & Core Facts
- Oil prices rebounded sharply, with U.S. crude rising over 7.5% to $101 per barrel and Brent crude climbing 4% to $99 per barrel. This followed a 16% drop in U.S. crude the previous day after the ceasefire announcement.
- Doubt over the ceasefire's viability grew as Iran accused the U.S. of breaching terms, while fewer than a half-dozen ships were observed transiting the Strait of Hormuz, a critical artery for global oil supplies.
Part 2: Deeper Dive & Context
Ceasefire Terms and Violations
Iran insists that a halt to Israeli strikes in Lebanon be included in any ceasefire deal, a demand the U.S. and Israel reject, calling it a separate conflict. The U.S. demands the Strait of Hormuz be fully opened, while Iran plans to police transit and impose tolls under any deal. Iranian officials, including parliamentary speaker Mohammad Bagher Ghalibaf, accused the U.S. of violating the agreement, stating, "Ceasefire violations carry explicit costs and STRONG responses."
Market Reactions and Economic Impact
The uncertainty triggered a pullback in Wall Street futures, with the Dow, S&P 500, and Nasdaq all down slightly. Meanwhile, the world's richest individuals saw their wealth surge by $90 billion on Wednesday as stock markets rallied on initial ceasefire optimism. However, gains were uneven, with Elon Musk losing $2 billion as Tesla stock dipped.
Long-Term Oil Price Forecasts
Goldman Sachs revised its second-quarter 2026 oil price forecasts downward, citing reduced risk premiums and partial reopening of the Strait of Hormuz. However, the bank warned that if the ceasefire fails, Brent crude could average $115 per barrel by the fourth quarter due to persistent supply disruptions.
Geopolitical and Logistical Challenges
Shippers have expressed concerns over the safety of transiting the Strait of Hormuz, with Iran issuing maps to guide vessels around mines. Analysts note that elevated insurance premiums and operational constraints mean little additional oil is likely to flow through the strait in the near term. Meanwhile, Israel's continued strikes in Lebanon have further complicated negotiations for a permanent peace deal.
Global Supply Chain Implications
The Strait of Hormuz typically carries about 20% of global oil supply, connecting producers like Iraq, Saudi Arabia, Kuwait, and Qatar to international markets. Disruptions have kept prices elevated compared to pre-conflict levels, with Brent crude previously surging past $119 per barrel before the ceasefire announcement.