West Texas Intermediate’s (WTI) price increased more than 2% toward $97 per barrel on Thursday, amid rising fear that the fragile truce in the Persian Gulf could break down because of Israel’s refusal to stop its bombardment of southern Lebanon.
Iran’s Islamic Revolutionary Guard Corps has retaliated with a threat that it will strike back hard unless Lebanon is included in a wider ceasefire deal.
Trading Economics reports that WTI’s reaction was directly related to Israeli strikes, raising doubts about the durability of a fragile Middle East ceasefire, while the Strait of Hormuz remains largely obstructed.
“Iranian media reported that oil tanker traffic through the strait had been suspended following the attacks, amid disputes between Tehran and the American-Israeli side over whether the truce extends to Lebanon.
“A senior Iranian official also stated that three provisions of the ceasefire agreement have already been breached.”
The three specific provision from Iran’s 10-point ceasefire proposal are the immediate cessation of hostilities by Israel in southern Lebanon, no drone intrusions in Iranian air space, and the Trump Administration acknowledgement of reported non-uranium enrichment by Iran, CBS News and the BBC report.
Meanwhile, US Vice President JD Vance said there were indications that the strait might begin reopening as he leads a US delegation to Islamabad for direct talks with Iran this weekend.
The near shutdown of Hormuz, which handles at least 20% of global crude and gas flows, has triggered the most severe disruption in oil markets, Trade Economics said.
