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SINGAPORE – Oil rebounded on April 9 after its biggest one-day drop since April 2020, as the Strait of Hormuz remained largely blocked and Israeli attacks on Lebanon threatened to derail the fragile ceasefire in the Middle East.
Brent crude, the global oil benchmark, climbed 3.9 per cent to US$98.42 a barrel as at 4pm Singapore time, after plunging more than 13 per cent on April 8. West Texas Intermediate (WTI), the US oil benchmark, rose 3.6 per cent to US$97.78.
Iran’s semi-official Fars news agency reported that passage of oil tankers through the strait was halted after Israeli strikes, although US Vice-President J.D. Vance countered that assertion, saying that “we are seeing signs that the straits are starting to reopen”.
Mr Vance will lead a US delegation to Islamabad for direct talks with Iran on April 11.
The near-halt of traffic through the waterway – through which about a fifth of the world’s crude and liquefied natural gas flowed before the US and Israel first struck Iran at the end of February – has caused the biggest-ever oil market disruption.
“This isn’t over just yet,” said Mr Dennis Kissler, senior vice-president for trading at BOK Financial Securities. “We will need to see a full opening of the strait with no obstacles before we see crude prices in the low US$80s for WTI. And I don’t see that in the next two weeks.”
Sporadic fighting continued throughout the region, including the Israeli moves in Lebanon and Iranian strikes on Gulf states. There is disagreement between Tehran and the American-Israeli side over whether the ceasefire covers Lebanon.
Iranian Parliament Speaker Mohammad-Bagher Ghalibaf said in a statement posted on X that three clauses of the ceasefire proposal had been violated so far.
Even once Hormuz transit picks up, the return of energy supplies will not be instant. Output has been reduced at oil and gas fields, while refineries have curtailed production or shut down. Some of them will take weeks – or possibly longer – to return to normal.
“We’re still far from over in Iran,” said Enverus oil and gas analyst Carl Larry. “Every day remains an adventure, but US$90 looks like a solid floor until we see fiction become fact.” BLOOMBERG
