Oil up 5% as Hormuz worries heighten supply risks

Oil prices surged nearly 5% on Thursday as concerns grew over the fragile two-week Middle East ceasefire, raising fears that energy flows through the vital Strait of Hormuz could remain limited, with shippers hesitant to resume transit.

Brent crude futures were up $4.41, or 4.7%, at $99.14 a barrel at 1449 GMT (10:49 a.m. ET), while U.S. West Texas Intermediate (WTI) crude rose $7.57, or 8%, to $99.15 a barrel, News.Az reports, citing foreign media.

Both benchmarks fell below $100 per barrel in the previous trading session, with WTI recording its biggest decline since April 2020, on optimism the ceasefire would result in a reopening of the strait.

However, Israel bombed more targets in Lebanon on Thursday, putting the ceasefire in further jeopardy after its biggest attacks of the war on its neighbor killed more than 250 people and threatened to torpedo Donald Trump’s truce from the outset.

“Crude futures are taking back some of yesterday’s losses as the Strait of Hormuz remains with just a small fraction of traffic, much less than the market anticipated yesterday,” Dennis Kissler, senior vice president of trading at BOK Financial.

“The ceasefire agreements are in question as Israel had continued to strike Lebanon and Vice President Vance is enroute to the Middle East to continue the talks,” Kissler added.

The Hormuz waterway connects supply from Gulf producers such as Iraq, Saudi Arabia, Kuwait and Qatar to global markets, and typically carries about 20% of global oil and gas supply.

News.Az 

By Ulviyya Salmanli