West Texas Intermediate (WTI) Crude Oil reverses course on Thursday, erasing earlier gains as a fresh wave of optimism sweeps through global markets, easing concerns over the durability of the US-Iran ceasefire. At the time of writing, WTI trades around $92.00 per barrel after touching a daily high of $95.20.
WTI fell nearly 10% on Wednesday after the United States and Iran reached a two-week truce. However, markets quickly turned cautious as doubts emerged over whether the agreement would hold. Iran said three points of the ceasefire had already been violated following Israeli strikes on Lebanon.
Israel claims that the ceasefire does not extend to its conflict with Hezbollah in Lebanon, while Iran insists that it does and has warned it could withdraw from the agreement if attacks continue.
These developments raised concerns that shipping through the Strait of Hormuz could remain disrupted, keeping supply risks elevated. However, signs of stabilization are now emerging. According to MarineTraffic data, the first non-Iranian Oil tanker has passed through the Strait of Hormuz since the ceasefire was announced.
Geopolitical tensions also appear to be easing somewhat. Israeli Prime Minister Benjamin Netanyahu said he has instructed his cabinet to begin direct negotiations with Lebanon. Separately, NBC, citing a US official, reported that President Donald Trump has urged Israel to scale back strikes on Lebanon to help ensure the success of ongoing negotiations with Iran.
That said, supply-side risks remain significant. An official at Saudi Arabia’s Energy Ministry said operational activities had halted at several energy facilities in Saudi Arabia due to recent attacks, according to the Saudi State News Agency. The Khurais and Manifa fields were hit, each cutting around 300,000 barrels per day (bpd), while damage to the East-West pipeline reduced throughput by about 700,000 bpd.
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