Key Points
- Crude oil reached $105 per barrel Thursday following heightened conflict in the Strait of Hormuz
- Three commercial vessels came under attack from Iran’s Revolutionary Guard Wednesday
- Brent crude closed above $100 for the first time since the ceasefire took effect
- Washington maintained its naval blockade despite extending the ceasefire agreement
- Diplomatic efforts between Washington and Tehran remain frozen with no future meetings planned
Global crude oil markets saw prices climb beyond $105 per barrel Thursday following renewed hostilities in the Strait of Hormuz, occurring mere hours after Washington announced an extension of its ceasefire arrangement with Tehran.
Three commercial vessels operating in the strait came under assault Wednesday by Iran’s Islamic Revolutionary Guard Corps. These attacks followed President Donald Trump’s announcement that the April 7 truce would continue without a predetermined end date.
Brent crude futures climbed 1.4% to reach $103.36 per barrel during early Thursday trading. West Texas Intermediate futures experienced a similar 1.4% increase, hitting $92.96. Brent had surged as much as 4.2% during the session before retreating following unverified reports of explosions within Iranian territory.
The critical waterway facilitates approximately 20% of global oil transportation. Fighting that commenced in late February has led to the near-complete closure of the strait, severely limiting crude flows from major Gulf producing nations.
Washington’s naval blockade continues to restrict vessels entering and departing Iranian ports. Abbas Araghchi, Iran’s Foreign Minister, characterized the blockade as a breach of the ceasefire terms.
Maritime traffic through the strait came to a virtual halt Thursday. Observers recorded only a single bulk carrier navigating the waterway.
Diplomatic Efforts Frozen
Washington and Tehran remain at an impasse on multiple fronts, including Tehran’s nuclear program and Israel’s military operations in Lebanon.
Masoud Pezeshkian, Iranian President, expressed openness to diplomatic dialogue while identifying the “blockade and threats” as primary barriers to meaningful negotiations. Tehran has indicated no intention to participate in discussions in the immediate future.
Mediation efforts continue, with sources pushing for potential peace discussions as soon as Friday, the Wall Street Journal reported. However, no official meeting has received confirmation.
“Tensions are remaining high, and with the US and Iran currently at a stalemate, until somebody flinches, the path of least resistance for prices still looks higher,” said Dennis Kissler, senior vice president at BOK Financial Securities.
Market Impact of Supply Constraints
Brent has climbed nearly 13% across just the past three trading sessions. Market analysts indicate traders are beginning to factor in an extended disruption period rather than anticipating a swift resolution.
“The lack of progress in peace talks means that hopes the oil market had for a resolution will fade,” said Warren Patterson, head of commodities strategy at ING. “The market will gradually become numb to these headlines if they turn out to be just headlines.”
Wednesday’s Energy Information Administration inventory report revealed declines across all primary refined product categories in the United States.
Global markets have increasingly relied on American supplies to compensate for Middle Eastern disruptions. This heightened demand drove total US oil and fuel exports to an all-time high, according to the agency’s data.
Thursday observations confirmed just one vessel transiting the Strait of Hormuz, with zero vessels recorded entering the critical passage.
