Oil prices edged higher on Thursday as lingering supply concerns in the Middle East outweighed optimism surrounding a temporary ceasefire between the United States and Iran.
International benchmark Brent crude climbed to $97.03 per barrel, up about 2.4% from its previous close of $94.75.
Similarly, US benchmark West Texas Intermediate (WTI) rose roughly 3.3% to $97.48 per barrel, compared to $94.41 in the prior session. The rebound highlights continued market sensitivity to geopolitical risks, particularly in one of the world’s most critical oil-producing regions.
Despite the announcement of a two-week ceasefire aimed at de-escalating tensions between Washington and Tehran, investors remain cautious.
Market participants are increasingly doubtful about the durability of the agreement and whether it will lead to a full restoration of crude supply flows from the Middle East.
A major source of concern is the Strait of Hormuz, a vital waterway through which a significant portion of global oil shipments passes daily.
Although vessel movement has partially resumed under the ceasefire arrangement, maritime operations remain far from normal.
Iran continues to maintain strict control over access to the waterway, requiring ships to coordinate passage with its military, particularly the Islamic Revolutionary Guard Corps (IRGC) Navy.
This has created delays and uncertainty, discouraging shipowners from resuming regular transit.
Reports from Iranian media indicate that a large number of vessels were stranded or awaiting clearance in the strait, underscoring the scale of the disruption.
Authorities have also cited security concerns, including the potential presence of naval mines in key transit zones, as justification for the continued restrictions.
The situation has led maritime intelligence firms to describe the current condition of the strait not as fully reopened, but rather as operating under a “supervised pause,” with limited and tightly controlled traffic.
Adding to market jitters are ongoing Israeli military operations in Lebanon. Despite the ceasefire between the US and Iran, Israel has continued to carry out airstrikes, particularly in southern Beirut, signaling that the truce may not extend to broader regional conflicts.
This escalation has raised fears that tensions could spill over further, potentially disrupting additional supply routes or infrastructure in the region.
Analysts warn that if the restrictions in the Strait of Hormuz persist or worsen, global oil supply could face significant strain.
Brent Crude is expected to average above $100 per barrel this year if the Strait of Hormuz remains mostly shut to tanker traffic for another month, Goldman Sachs analysts said on Thursday.
“We continue to see the risks to our price forecast as skewed to the upside,” the U.S. investment bank said in a note reported by Bloomberg after the U.S. and Iran announced a two-week ceasefire on Tuesday night.
Goldman cut its price expectations for crude oil late on Wednesday following the news of a ceasefire deal between Iran and the United States.