Straits of Hormuz “Open and Close Again,” Oil Prices Waver Between Hope and Fear

International crude oil prices rebounded after plunging again on Wednesday, a move driven by the market’s reassessment of the direction of the situation in the Middle East after recent ceasefires. Brent crude and WTI crude are trading above $98.70 and $96.70 respectively, and prices are fluctuating sharply as the market questions the sustainability of the ceasefire agreement.
Although the ceasefire agreement once eased the market’s initial concerns about global supply being disrupted, continued attacks and logistical problems still keep traders cautious. This indicates that the oil market is highly sensitive to geopolitical changes in major supply-channel regions.
The recent drop in oil prices is mainly based on market expectations that the Strait of Hormuz will reopen. However, shipping companies still need to wait for solid assurances before resuming operations, so global supply will not recover immediately. What’s more, Iran closed the Strait of Hormuz again early Thursday morning, and in the short term, crude oil still seems unable to flow normally. Even if the strait reopens again in the short term, safety concerns, high insurance costs, and operational restrictions will continue to constrain the volume of oil supply. Therefore, a rapid realization of the actual increase in oil supply is difficult, which provides support for short-term oil prices.
Tensions in the Middle East keep oil prices volatile and full of uncertainty. The ceasefire is facing increasing pressure due to the ongoing conflict in the region. The conflict between Israel and Lebanon shows that many issues have not yet been resolved. Therefore, attacks on Middle East energy infrastructure may further intensify oil price fluctuations. This persistent uncertainty creates a fragile environment for oil pricing—any escalation of tensions and the resulting disruption to oil transportation routes could push oil prices higher; conversely, when tensions ease and international shipping resumes, oil prices may face downward pressure and even fall below $90. At present, oil prices are mainly influenced by uncertainty in the ceasefire process and the security outlook for energy infrastructure.