Oil Market Today:Â Oil plummeted on Wednesday, falling below $100 a barrel, on hope of the Strait of Hormuz reopening after President Donald Trump agreed to a two-week ceasefire with Iran. Brent crude futures settled $14.52, or 13.29%, lower at $94.75 a barrel, while U.S. West Texas Intermediate crude slid $18.54, or 16.41%, to $94.41 a barrel.
Oil prices fell in anticipation of the strait reopening and energy supplies that have built up being able to pass through the shipping route, said Andrew Lipow, founder of Lipow Oil Associates. About 20% of the world’s daily oil supply passes through the narrow waterway.
Is the Strait of Hormuz Actually Open?
Despite the ceasefire announcement, shipping sources said the Iranian navy threatened ships attempting to pass through the strait without Tehran’s permission with destruction on Wednesday and that transit remained shut. Iran had said it would halt its attacks if strikes against it stopped and that safe transit would be possible for two weeks in coordination with Iranian armed forces.
However, a senior Iranian official involved in the talks told Reuters that Iran could open the strait in a limited and controlled way on Thursday or Friday ahead of the meeting between U.S. and Iranian officials in Pakistan. “Safe passage for ships in the Strait of Hormuz will be a key point in the talks,” said Raymond James analyst Pavel Molchanov.
What Did Iran Say About Ceasefire Violations?
Iran’s parliament speaker Mohammad Baqer Qalibaf said in a post on X that key clauses of a 10-point ceasefire proposal were violated even before U.S.-Iran peace talks are set to start on Friday in Pakistan, adding that in such a situation a bilateral ceasefire or negotiations were unreasonable.
The breaches included the violation of a ceasefire in Lebanon, the entry of a drone into Iranian airspace, and the denial of Iran’s right to uranium enrichment, Qalibaf said. Earlier on Wednesday, Trump told PBS News that Lebanon is not part of the ceasefire agreement “because of Hezbollah.”
What Is Happening in Lebanon?
On Wednesday, Israel carried out its heaviest strikes on Lebanon since the conflict with Hezbollah broke out last month, even as the Iran-aligned group paused attacks on northern Israel and Israeli troops in Lebanon under the ceasefire. The Lebanese Civil Defense reported that at least 254 people were killed and 1,165 injured in the strikes.
Iran attacked Saudi Arabia’s East-West Pipeline just hours after the ceasefire was agreed, an industry source told Reuters, hitting its only crude oil export route since hostilities began. Several Gulf states said early on Wednesday they identified missile launches and drone attacks or issued warnings to civilians to take shelter.
How Did Markets React to the Ceasefire?
“Overall, the market is hopeful more oil is going to reach the market… but it is still concerned that it is a very fragile ceasefire and it may not last,” Lipow said. Oil futures pared losses after U.S. government data showed a larger-than-expected build in crude stockpiles.
U.S. crude stocks rose by 3.1 million barrels to 464.7 million barrels during the week ended April 3, the Energy Information Administration said. That was higher than the 701,000-barrel build forecast in a Reuters poll. Shippers were seeking clarity on the logistics, while refiners inquired about new crude loadings on Wednesday in response to the ceasefire deal.
What Is the Outlook for Oil Prices?
“Oil is set to remain meaningfully above pre-war levels until there is clear evidence of shipping normalization,” said Raymond James analyst Pavel Molchanov. The ceasefire remains fragile, with Iran alleging violations and Israel continuing strikes on Lebanon.
With merchants waiting for concrete proof that the strait has reopened to commercial travel, the market is optimistic but cautious. The actual reopening of the waterway and real progress in negotiations are prerequisites for any long-term price reduction.
FAQs: Oil Prices and the Ceasefire
Q: How much did oil prices drop?
A: Brent crude fell 13.29% to $94.75 per barrel. WTI slid 16.41% to $94.41 per barrel.
Q: Is the Strait of Hormuz open?
A: No. Shipping sources said transit remains shut, with the Iranian navy threatening ships attempting passage.
Q: What did Iran say about ceasefire violations?
A: Iran’s parliament speaker said key clauses were violated, including strikes on Lebanon and denial of uranium enrichment rights.
Q: What happened in Lebanon?
A: Israel carried out its heaviest strikes, killing at least 254 people, according to Lebanese Civil Defense.
Q: When could the strait reopen?
A: A senior Iranian official said it could open in a limited way on Thursday or Friday ahead of Pakistan talks.
Q: What is the outlook for oil prices?
A: Analysts say oil will remain above pre-war levels until there is clear evidence of shipping normalization.
Disclaimer: This information is based on inputs from news agency reports. TSG does not independently confirm the information provided by the relevant sources.
