Key Takeaways
- Brent crude advanced 4% to approximately $99 per barrel; WTI surged beyond $100
- Strait of Hormuz traffic remains severely restricted, with merely four vessels passing through Wednesday
- Iran has established a toll collection system, requiring payment for passage rights
- Tehran accuses Washington of breaching ceasefire terms; ongoing Israeli operations in Lebanon fuel tensions
- Both Goldman Sachs and UBS project Brent at $80 for Q4, though they acknowledge significant upward pressure
Energy markets witnessed a dramatic rally Thursday following deteriorating conditions in the US-Iran ceasefire and persistent bottlenecks at the Strait of Hormuz.
Brent crude futures advanced 4% to reach approximately $98.57 per barrel. West Texas Intermediate surged 6.6% to cross the $100 threshold. Wednesday had seen both benchmarks decline following Tuesday’s ceasefire declaration.
The market reversal followed mounting evidence that the ceasefire agreement was deteriorating.
Mohammad Bagher Ghalibaf, Iranian parliamentary speaker, declared on X that the US-Iran framework agreement “has been openly and clearly violated.” He cited ongoing Israeli military operations in Lebanon and American drone incursions into Iranian territory as factors rendering negotiations “unreasonable.”
Tehran maintains support for Hezbollah forces in Lebanon and demands comprehensive coverage of Lebanon in any truce arrangement. Washington maintains its agreement with Iran does not extend to Lebanese territory.
Israeli forces conducted strikes against more than 100 Lebanese targets Wednesday alone, representing one of the campaign’s most intensive periods. Military operations have persisted despite international appeals for de-escalation.
Hormuz Shipping Restrictions Fuel Price Rally
The Strait of Hormuz facilitates roughly 20% of global oil supply. The waterway has operated at minimal capacity since late Tuesday when the ceasefire was announced.
S&P Global Market Intelligence documented only four vessel crossings Wednesday. This represents a fraction of typical daily volumes. Reuters confirmed a single oil tanker completed passage within the past 24 hours.
Tehran has communicated to intermediaries that daily crossings will be capped at approximately twelve vessels, with mandatory toll payments. Various sources indicate fees of $1 per barrel. Capital Economics characterized this transformation as converting an open waterway into a regulated toll passage.
Dr. Sultan Al-Jaber, who leads Abu Dhabi National Oil Company, stated on LinkedIn: “The Strait of Hormuz is not open. Access is being restricted, conditioned and controlled.”
MarineTraffic, a vessel-tracking service, reports over 400 ships remain waiting in the region.
Washington Signals Military Response if Agreement Collapses
Vice President JD Vance stated Wednesday evening that absent meaningful reopening of the strait, the United States would “not abide by our terms if the Iranians are not abiding by their terms.”
President Trump wrote on Truth Social Thursday morning that American military presence would continue in the Middle East “until such time as the real agreement is fully complied with.” He cautioned that Iranian non-compliance would mean “the ‘shootin’ starts.”
Trump confirmed in additional commentary that Washington and Tehran have reached understanding that the strait will operate safely and openly.
Goldman Sachs research teams anticipate energy shipments beginning recovery this weekend, projecting a gradual month-long restoration to pre-conflict export volumes. Their Q4 Brent projection remains at $80 per barrel while acknowledging upside scenarios. Extended closure lasting an additional month could push Q4 averages to $100. Inability of Gulf producers to fully restore capacity could drive prices to $115.
UBS maintains an $80 Brent forecast for Q4 while highlighting unresolved matters, including whether Gulf nations like Saudi Arabia and the UAE would dispatch tankers through Iranian-controlled waters. These two countries currently have a combined 4 million barrels daily of shuttered production.
American and Iranian negotiating teams are scheduled to convene in Islamabad, Pakistan, this Saturday.
