Brent Crude Recovers as Doubts Over Iran Ceasefire Raise Supply Concerns

(MENAFN) Brent crude prices recovered on Wednesday following sharp earlier declines, as reports cast doubt on the stability of a US-mediated ceasefire with Iran, raising worries about Middle East oil supplies and transit through the Strait of Hormuz.

By 1445 GMT, Brent futures were trading near $95 per barrel, rebounding from a drop of more than 16% earlier in the day that had pushed prices toward $90, marking their lowest level in over a month.

The initial decline came after the US and Iran agreed to a two-week ceasefire, which had led markets to anticipate reduced risks to global oil supply.

Caution returned, however, after reports indicated that Iran was preparing “deterrent” strikes against Israel over alleged ceasefire violations in Lebanon. Other reports suggested that Iran could withdraw from the US ceasefire if Israel continued what was described as violations in Lebanon.

Market anxiety also stemmed from uncertainties regarding the ceasefire’s coverage. Israel has reportedly stated that the truce does not extend to Lebanon, even as the broader agreement was framed as a measure to ease regional tensions and reopen the Strait of Hormuz.

Further concerns arose when reports indicated that oil tanker traffic through the strait had been halted again following Israeli strikes on Lebanon, despite two tankers earlier passing safely after the ceasefire announcement. Analysts warned that any renewed escalation could once again threaten one of the world’s most crucial oil transit routes.

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