Oil Rises as Ceasefire Uncertainty Keeps Markets on Edge
Oil climbed again on Thursday as traders reassessed the fragile US-Iran ceasefire and the risk to the Strait of Hormuz. The move came after the boss of Abu Dhabi’s state-owned oil company warned that the strait is “not open” despite the truce agreed earlier this week. Brent crude rose by more than 4% to almost $99 a barrel, while New York light crude briefly topped $100. 29 a barrel in Eastern Time terms on Thursday.
Markets react to a shaky truce
The latest price move added to a week of violent swings in oil markets. On Wednesday, Brent had fallen 13. 29% to a four-week low of $94. 75 a barrel, showing how quickly sentiment has shifted as investors weigh the ceasefire against continuing tension in the Middle East.
Global stocks also wobbled. The uncertainty around the truce kept investors cautious even as some markets had earlier rebounded strongly after the ceasefire plan was announced. The backdrop remains a concern for energy traders because the Strait of Hormuz is a vital shipping route and recent disruptions have already altered the flow of supply.
Officials warn the economic damage may last
Kristalina Georgieva, managing director of the International Monetary Fund, said the war would permanently scar the global economy even if a durable peace deal is eventually reached. She said the “scarring effects” already seen would mean slower global growth this year than first expected, and added that even the most hopeful scenario would still involve a growth downgrade.
That warning matters because it puts the latest oil shock inside a broader economic picture. Higher energy costs can feed through to transport, trade and household bills, while the market reaction in stocks shows how quickly investors connect the ceasefire’s fate to the outlook for growth.
What traders are watching next
In recent days, some ships have passed through the Strait of Hormuz, though far fewer than usual. Saul Kavonic, an analyst at MST Marquee, said that if more tankers stranded near the strait pass through during the ceasefire, markets could see some relief in the coming weeks.
But he also said energy production in the Middle East is unlikely to fully resume until there is confidence in a lasting peace deal, and it could take months for production to restart because of damage to energy infrastructure. That leaves oil vulnerable to fresh jumps if the ceasefire weakens again, with traders watching every sign of traffic through the strait and every update on the truce in Eastern Time.
