Oil Prices Climb As US-Iran Ceasefire Faces Fresh Strain
Markets React to Renewed Tensions
GLOBAL oil prices have rebounded amid growing uncertainty over the durability of a ceasefire between the United States and Iran, following fresh military escalations in the Middle East.
The latest spike comes after Israeli strikes on Lebanon raised fears that the fragile truce could collapse, triggering renewed disruptions in global energy supply.
Strait of Hormuz at the Centre of Concerns
At the heart of market anxiety is the Strait of Hormuz, a critical global oil transit route.
While the ceasefire agreement initially promised the reopening of the waterway, reports suggesting that Iran may keep it closed have unsettled investors.
Iran has also issued warnings that vessels attempting to pass without approval could face military action, further heightening risks for global shipping.
Oil Prices and Stocks Reverse Course
Brent crude rose by 2 per cent to $96.53 per barrel, while West Texas Intermediate climbed 2.8 per cent to $97.02, reflecting mounting pressure on the fragile agreement.
The ripple effects extended to global equities, with Japan’s Nikkei 225 falling 0.5 per cent and South Korea’s Kospi declining 1.8 per cent.
Analysts say the volatility reflects broader uncertainty about whether the ceasefire will hold and how it will impact energy flows.
Shipping Disruptions Deepen Uncertainty
Shipping activity through the Strait of Hormuz has dropped significantly, with only a handful of vessels crossing daily compared to about 130 before the conflict.
Experts estimate it could take at least 10 days to clear the current backlog even if normal operations resume.
Shipping firms, including Germany-based Hapag-Lloyd, say they are struggling to plan operations amid rapidly changing developments.
Global Supply Chain at Risk
Industry observers warn that any prolonged disruption could have far-reaching consequences for global supply chains and energy prices.
Concerns are also growing about the possibility of new transit fees, which could further drive up costs for shipping companies and consumers.
Escalation Raises Stakes
The situation has been further complicated by ongoing violence in Lebanon, where Israeli airstrikes have reportedly caused significant casualties.
In response, Hezbollah has launched retaliatory attacks, adding another layer of complexity to the already tense situation.
Diplomatic Efforts Continue
Amid the uncertainty, US Vice President JD Vance is expected to participate in negotiations with Iran aimed at stabilising the ceasefire.
However, with tensions still high, markets remain on edge as the world watches for signs of either escalation or resolution.
