Oil prices rose and global stock markets retreated on Thursday as concerns grew over the stability of the newly announced US-Iran ceasefire. The fragile truce, brokered by Washington, came under strain after Tehran warned it could resume hostilities following Israel’s intensified military campaign in Lebanon.
The previous day, equity markets had surged and crude oil prices had plunged after US President Donald Trump announced a two-week halt in the conflict. Iran also signalled its willingness to reopen the Strait of Hormuz, a critical waterway through which about a fifth of the world’s oil and gas supplies pass, as peace negotiations began.
However, less than 24 hours into the ceasefire, tensions resurfaced. Israeli officials clarified that the truce did not cover its ongoing operations against Iran-backed Hezbollah in Lebanon, where it continued airstrikes. Vice President JD Vance reinforced this position, stating that if Iran chose to let the talks collapse over Lebanon—an issue the US never included in the ceasefire—that would be Tehran’s decision.
Iran rejected this interpretation, arguing it violated the terms of the agreement. Reports indicated that the Strait of Hormuz had been closed again, although Tehran said it was providing alternative shipping routes due to the risk of sea mines. Iran’s parliament speaker, Mohammad Bagher Ghalibaf, claimed the United States had breached the truce by continuing attacks in Lebanon, allegedly sending a drone into Iranian airspace, and denying Iran’s right to uranium enrichment.
Hezbollah claimed it had launched rocket attacks on Israel in response to what it described as ceasefire violations. A senior US official added that Iran’s 10-point counter-proposal differed significantly from the deal Washington had agreed to.
Market reactions reflected the growing uncertainty. West Texas Intermediate crude jumped around 3 per cent after a 16 per cent drop the previous day, while Brent crude rose more than 2 per cent following a 13 per cent decline. Stock markets in Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, and Taipei all fell.
Attention is now turning to high-stakes talks in Pakistan, expected on Friday or Saturday, with Vice President Vance leading the US delegation. Analysts noted that Iran’s proposal—which includes control over the Strait of Hormuz, acceptance of its uranium enrichment programme, lifting of sanctions, and US military withdrawal from the Gulf—conflicts with Trump’s 15-point peace plan.
Despite hopes for a lasting resolution, experts warned that even if the ceasefire holds, a swift return to normal oil supplies is unlikely. Regional infrastructure damaged in the conflict could require billions of dollars and months to repair. Around 800 ships remain stranded in the Gulf since hostilities escalated in late February, according to shipping journal Lloyd’s List.
Still, some analysts remain cautiously optimistic that oil prices could ease further if the Strait of Hormuz reopens and remains accessible beyond the two-week truce.
