Oil prices surge as Hormuz tensions persist despite US–Iran ceasefire

Global crude oil prices rebounded sharply on Thursday amid renewed uncertainty over supply disruptions in West Asia, as doubts persist over the durability of the US–Iran ceasefire and restrictions continue in the vital Strait of Hormuz.

Brent crude rose up to 3.31 per cent to $97.89 per barrel, while WTI crude climbed 4.2 per cent to $98.38, reversing steep losses from the previous session. On Wednesday, benchmarks had dropped nearly 20 per cent below the $100 mark, with WTI posting its sharpest fall since April 2020 on hopes that easing tensions would restore normal oil flows.

However, fresh geopolitical risks have rattled markets again. The Strait of Hormuz — a crucial route for oil exports from Gulf producers such as Iraq, Saudi Arabia, Kuwait and Qatar — remains partially restricted, raising fears of prolonged supply tightness.

Reports of Israeli strikes on Hezbollah targets in Lebanon and renewed missile and drone attacks in countries including Kuwait, Bahrain and the UAE have further escalated tensions. There are also indications that Iran has again restricted access to the Strait, even as it reportedly issued navigational guidance and safe passage routes to select vessels.

Shipping companies remain cautious, seeking clarity on ceasefire terms before resuming full operations through the waterway. Meanwhile, regional energy infrastructure continues to face risks, with reports of strikes on facilities, including a key pipeline in Saudi Arabia used to bypass the Strait.

Adding to uncertainty, Donald Trump said US military assets would remain “in and around” Iran, signalling continued strategic pressure in the region.

Market impact:
The surge in oil prices weighed on global equities. India’s benchmark indices Sensex and Nifty slipped around 0.7 per cent, while major Asian markets — including Japan’s Nikkei, South Korea’s KOSPI and Hong Kong’s Hang Seng — declined by up to 1 per cent.

With PTI inputs