(April 9): Oil rebounded on Thursday after its biggest one-day drop since April 2020, as the Strait of Hormuz remained largely blocked and Israeli attacks on Lebanon threatened to derail the fragile ceasefire in the Middle East.
Brent rose towards US$97 ($123.64) a barrel after slumping 13% on Wednesday. West Texas Intermediate (WTI) was also near US$97. Iran’s semi-official Fars news agency reported that passage of tankers through the strait was halted after Israeli strikes, although US Vice President JD Vance countered that assertion, saying “we are seeing signs that the straits are starting to reopen”.
On Thursday, two fully laden Chinese oil tankers in the Persian Gulf were approaching the strait, potentially putting them on track to become the first such vessels to cross since the ceasefire was announced. A successful passage is not guaranteed, and there’s been little change in traffic over the past day.
The near-halt of traffic through the waterway — through which about a fifth of the world’s crude and liquefied natural gas flowed before the US and Israel first struck Iran at the end of February — has caused the biggest-ever oil market disruption. Vance will lead a US delegation to Islamabad for direct talks with Tehran on Saturday morning local time.
“This isn’t over just yet,” said Dennis Kissler, a senior vice-president for trading at BOK Financial Securities Inc. “We will need to see a full opening of the strait with no obstacles before we see crude prices in the low US$80s for WTI. And I don’t see that in the next two weeks.”
Sporadic fighting continued, including the Israeli moves in Lebanon and Iranian strikes on Gulf states. There’s disagreement between Tehran and the American-Israeli side over whether the ceasefire covers Lebanon.
See also: Saudi oil pipeline damage said to be limited after drone strike
Iranian Parliament Speaker Mohammad-Bagher Ghalibaf said in a statement on X that three clauses of the ceasefire proposal had been violated.
Meanwhile, the Islamic Republic’s Ports and Maritime Organization announced two designated safe routes for vessels entering and exiting the strait, according to state-run Nour News. The passageways were established to avoid possible mines, according to the report.
White House Press Secretary Karoline Leavitt reiterated on Wednesday that US President Donald Trump expected the Strait of Hormuz to be “reopened immediately”.
See also: Exxon sees 6% of its worldwide output shut on Mideast conflict
Trump said in a social media post that US military personnel and weaponry would remain in place around Iran “until such time as the real agreement reached is fully complied with”. If Iran doesn’t comply, ‘the ‘shooting starts’, bigger, and better, and stronger than anyone has ever seen before,” he said.
Even once Hormuz transit picks up, the return of energy supplies won’t be instant. Output has been reduced at oil and gas fields, while refineries have curtailed production or shut down. Some of those will take weeks — or possibly longer — to return to normal.
“We are still far from over in Iran,” said Carl Larry, an oil and gas analyst at Enverus. “Every day remains an adventure, but US$90 looks like a solid floor until we see fiction become fact.”
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Uploaded by Tham Yek Lee
