Crude Oil Surges Past $100 Amid Hormuz Strait Closure and Crumbling US-Iran Truce - Blockonomi

by · Blockonomi

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  • WTI crude surged past $100 per barrel while Brent climbed 4% to approximately $99
  • Only four vessels passed through the Strait of Hormuz on Wednesday, far below normal traffic
  • Tehran is implementing a toll collection system for ships seeking passage through the waterway
  • Iran claims Washington breached ceasefire terms, citing Israeli military operations in Lebanon
  • Major banks project Brent at $80 by Q4, though significant upside risks remain if blockade persists

Energy markets experienced a dramatic reversal Thursday as crude prices surged following indications that the freshly-signed US-Iran ceasefire agreement was unraveling, while maritime traffic through the critical Strait of Hormuz remained virtually nonexistent.

Brent crude futures advanced 4% to approximately $98.57 per barrel, while West Texas Intermediate surged 6.6% to breach the $100 threshold. This marked a stark contrast to Wednesday’s session, when both benchmarks had tumbled following Tuesday’s ceasefire declaration.

The dramatic price swing occurred as market participants realized the ceasefire framework was failing to hold as anticipated.

Mohammad Bagher Ghalibaf, Iran’s parliamentary speaker, declared on X that the US-Iran agreement “has been openly and clearly violated.” He cited Israel’s ongoing military operations in Lebanon and American drone incursions into Iranian territory as evidence that continuing negotiations had become “unreasonable.”

Tehran provides support to Hezbollah forces in Lebanon and has maintained that any ceasefire arrangement must encompass Lebanon. However, Washington has stated its bilateral agreement with Iran does not extend to Lebanese territory.

Israeli forces conducted strikes against more than 100 targets across Lebanon on Wednesday alone, representing one of the most intensive days of its ongoing military operation. The Israeli Defense Forces have maintained operational tempo despite widespread international pressure for de-escalation.

Hormuz Waterway Restriction Fuels Energy Market Rally

The strategic Strait of Hormuz facilitates roughly 20% of global oil supply. The waterway has remained predominantly closed since the ceasefire announcement late Tuesday evening.

According to S&P Global Market Intelligence data, just four vessels successfully navigated the strait Wednesday. This figure sits dramatically below typical daily volumes. Reuters tracking indicated a single oil tanker completed the passage in the most recent 24-hour period.

Tehran has informed international mediators it will limit daily crossings to approximately one dozen vessels while implementing fee assessments. Multiple sources indicate the toll may reach $1 per barrel. Capital Economics analysts noted this effectively transforms the strait from an unrestricted international waterway into a regulated toll passage.

Dr. Sultan Al-Jaber, chairman of Abu Dhabi National Oil Company, stated on LinkedIn: “The Strait of Hormuz is not open. Access is being restricted, conditioned and controlled.”

Maritime tracking service MarineTraffic reports over 400 vessels remain stuck in the region awaiting passage.

Washington Threatens Military Response if Agreement Collapses

Vice President JD Vance declared Wednesday evening that should the strait fail to begin reopening, the United States would “not going to abide by our terms if the Iranians are not abiding by their terms.” President Trump posted Thursday morning on Truth Social that American military forces would maintain their Middle East presence “until such time as the real agreement is fully complied with.” He cautioned that failure by Iran to uphold its commitments would result in “the ‘shootin’ starts.”

In a follow-up post, Trump verified that both nations have agreed the strategic waterway will remain open and secure for maritime traffic.

Goldman Sachs strategists indicated they anticipate energy shipments will begin normalizing this weekend, projecting a gradual month-long restoration to pre-conflict export volumes. Their Q4 Brent projection remains at $80 per barrel, though they highlighted substantial upside scenarios. An additional month of strait closure could push Q4 prices to $100 average. Complete failure to restore Gulf production capacity might drive prices to $115.

UBS maintained its $80 Q4 Brent forecast while emphasizing unresolved critical issues, particularly whether major Gulf producers including Saudi Arabia and the UAE would risk sending tankers through a waterway now under Iranian authority. These nations currently have approximately 4 million barrels daily of offline production capacity.

American and Iranian negotiating teams are scheduled to convene in Islamabad, Pakistan, this Saturday.

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