Oil Rises as Hormuz Closed, US-Iran Weigh Truce

WTI crude oil futures rose above $93 per barrel on Thursday as traders balanced signs that the US and Iran may extend a ceasefire with the ongoing double blockade of the Strait of Hormuz, which continues to disrupt flows. Both sides are reportedly considering a two week extension to allow more time for negotiations, while traffic through the key waterway linking the Persian Gulf to global markets remains largely paralyzed as the conflict nears its seventh week. The US has imposed a blockade to restrict Iranian shipments, while Tehran has kept the strait closed to most other vessels and warned it will halt all regional trade if restrictions persist. US Defense Secretary Pete Hegseth said forces remain ready to resume combat if ordered. The conflict has caused a major supply shock, lifting inflation pressures and weighing on growth, though prices have eased from earlier peaks despite remaining significantly above pre war levels.

WTI crude futures rose to around $92 per barrel on Thursday after facing pressure earlier in the week, as investors assessed the likelihood of an extension of the ceasefire between the US and Iran while weighing the possibility for a broader agreement that could end the conflict and reopen the Strait of Hormuz. Reports indicated that Washington and Tehran are mulling an extension to their two-week ceasefire to allow more time to negotiate a peace deal. Meanwhile, the Strait of Hormuz remains effectively closed, with a US naval blockade on Iranian ports still in place, keeping markets on edge over further supply disruptions. Iran also warned it could retaliate against an extended US blockade by suspending shipments across the Persian Gulf, the Sea of Oman, and the Red Sea. Markets are now turning their attention to a likely second round of US-Iran talks, expected to center on reopening the strait and Iran’s nuclear enrichment activities.

WTI crude futures swung around $92 per barrel on Wednesday and volatility is expected to persist as traders assess ongoing developments in the Middle East and a steady stream of headlines for signs that the conflict could ease soon and traffic through the Strait of Hormuz could resume. The US military said it had fully halted commercial traffic to and from Iranian ports, though shipping data indicated that several Iran-linked vessels continued to transit the strait. Meanwhile, The Washington Post reported that the US Department of Defense plans to deploy an additional 6,000 troops to the region in the coming days, followed by a further 4,200 by the end of the month. Israeli forces also carried out airstrikes on towns in southern Lebanon. These developments come as a second round of talks between the US and Iran is expected in the near term. US President Trump said the conflict is “very close to over,” adding that Iranian authorities appear willing to reach a peace agreement.