Oil prices staged a recovery on Thursday after logging their sharpest single-day fall since 2020, as supply concerns resurfaced with disruptions in the Strait of Hormuz and rising geopolitical tensions in the Middle East.
Brent crude for June delivery rose 2.1% to $96.73 a barrel, while West Texas Intermediate (WTI) for May gained 2.7% to $96.99. The rebound follows a steep 13% drop in the previous session, highlighting the volatility gripping global oil markets.
The Strait of Hormuz — a key artery for global energy trade — remains a major source of uncertainty. The waterway typically carries about 20% of the world's crude oil and liquefied natural gas shipments, making any disruption a significant market-moving event.
Iranian media reports suggested tanker movement through the strait had effectively stalled following Israeli strikes. However, US Vice President JD Vance indicated that there are early signs shipping activity could begin to resume, pointing to a fluid and evolving situation. Adding to this, Iran's Ports and Maritime Organization has announced designated safe corridors for vessels transiting the strait, aimed at reducing risks from potential threats such as naval mines.
ALSO READ: Iran Closes Strait Of Hormuz After Israel's Lebanon Strike Puts Ceasefire Under Strain
Ceasefire Uncertainty Adds to Volatility
Tensions across the region remain elevated, with continued military activity clouding the outlook. Israeli operations in Lebanon and Iranian strikes targeting parts of the Gulf have raised concerns over the stability of the fragile ceasefire.
Iranian Parliament Speaker Mohammad-Bagher Ghalibaf has said that multiple provisions of the ceasefire agreement have already been violated. Meanwhile, disagreements persist between Iran and the US-Israel alliance over whether the truce extends to Lebanon. Diplomatic efforts are underway, with JD Vance set to lead a US delegation for talks with Iran in Islamabad.
Even if tanker movement through Hormuz normalises, the return of oil supplies is expected to be gradual. Production at several oil and gas fields has been curtailed, and some refineries have reduced operations or shut down.
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