Oil prices moved higher on Thursday after recording their largest single-day decline since April 2020, as ongoing disruptions in the Strait of Hormuz and renewed tensions in the Middle East raised fresh concerns about global supply.
As of 05:22 ET (09:22 GMT), Brent crude futures for June delivery were up 2.8% at $97.68 per barrel, while U.S. West Texas Intermediate (WTI) futures gained 3.3% to $97.50 per barrel.
Both benchmarks had plunged more than 13% on Wednesday following U.S. President Donald Trump’s announcement of a temporary ceasefire with Iran.
Lebanon strikes raise questions about ceasefire
Israeli airstrikes in Lebanon escalated significantly on Wednesday, despite the two-week ceasefire between the United States and Iran announced by President Trump a day earlier.
The continued military action has highlighted differing interpretations of the ceasefire agreement, with Israel suggesting that its operations targeting Hezbollah fall outside the scope of the truce.
Iran responded by adopting a tougher position, stating that negotiations with Washington would be “unreasonable” under the current circumstances and accusing Israel of breaching the ceasefire.
At the same time, Iran halted the movement of oil tankers through the Strait of Hormuz, delaying any meaningful rebound in global oil shipments.
“With a full reopening of the strait unlikely in the near term, oil prices are expected to remain supported, as disruptions linked to reduced output and refinery shutdowns will take time to unwind,” ING analysts said in a note.
Oil prices had dropped sharply on Wednesday after President Trump announced the ceasefire and pledged that Washington would assist in easing shipping congestion around the Strait.
U.S. crude inventories climb to three-year high – EIA
Data released by the U.S. Energy Information Administration showed that crude inventories increased by 3.1 million barrels to reach 464.7 million barrels in the week ending April 3. The figure marked the highest level in almost three years and came as a surprise to markets, which had expected a decline of about 1.0 million barrels.
Meanwhile, fuel stockpiles moved in the opposite direction. Distillate inventories, which include diesel and heating oil, fell by 3.1 million barrels amid strong export demand, while gasoline stocks dropped by 1.6 million barrels.