Oil Surges Above $97 as Markets Question US-Iran Ceasefire Stability

Oil prices climbed back above $97 per barrel on Thursday, as global markets began to doubt the durability of the recently announced two-week ceasefire between the United States and Iran.

After an initial drop earlier in the week following the ceasefire announcement, crude prices quickly reversed direction. Brent crude rose by 2.4% to $97.02 per barrel, while US benchmark WTI increased by 3.3% to $97.50. Just days earlier, both had briefly fallen below $92.

This rebound reflects growing skepticism among investors. Despite diplomatic signals, Iran has largely kept the Strait of Hormuz restricted, a critical route through which roughly 20% of the world’s oil supply typically passes. Its continued closure signals that tensions remain unresolved and the ceasefire may be fragile.

Further concerns have been fueled by ongoing Israeli airstrikes in Lebanon, which have resulted in significant casualties. These developments raise doubts about whether the broader regional conflict is truly de-escalating.

Asian markets reacted negatively to the uncertainty. Japan’s Nikkei 225 fell by 0.9%, while South Korea’s Kospi dropped 1.6%. Hong Kong’s Hang Seng declined 0.4%, and China’s Shanghai Composite lost 0.7%. Australian and Taiwanese indexes also edged lower, while US futures showed slight declines.

This cautious sentiment contrasts sharply with the previous day on Wall Street, where optimism around the ceasefire drove strong gains. The S&P 500 rose 2.5%, the Dow Jones increased 2.9%, and the Nasdaq climbed 2.8%.

Travel-related stocks led that rally, with major airlines and cruise companies recovering part of their recent losses driven by rising fuel costs linked to the conflict.

Looking ahead, peace talks aimed at reaching a more permanent resolution could begin as early as Friday in Pakistan. The US delegation is expected to be led by Vice President JD Vance.

However, uncertainty remains high. With the Strait of Hormuz still restricted and military actions continuing in the region, it is unclear whether the ceasefire will hold long enough to support meaningful negotiations.

Meanwhile, safe-haven assets showed mixed movements. Gold declined by 0.7% to $4,743.20 per ounce, and silver fell 1.6% to $74.18, as some of the demand driven by geopolitical fear faded. Currency markets saw the dollar strengthen slightly against the yen, while the euro posted modest gains against the dollar.