Oil prices surged on Thursday as tensions over the Strait of Hormuz remained unresolved, highlighting the impact of nearly two months of conflict.
The price of Brent crude, for June delivery, climbed 3.10% to $105.07 per barrel. Its US counterpart, West Texas Intermediate (WTI), also rose - by 3.11% to $95.85 per barrel.
During the trading session, oil prices fluctuated sharply, at times falling into the red before climbing as much as 5%.
Brent crude remains above the $100 mark
US President Donald Trump extended the ceasefire with Iran unilaterally, easing concerns about further damage to energy infrastructure in the Gulf region, according to Carsten Fritsch, an analyst at Commerzbank.
However, Brent crude stayed above the symbolic $100 mark due to disappointment over the failure to reopen the Strait of Hormuz, coupled with tense anticipation surrounding upcoming negotiations between the US and Iran, Fritsch added.
Iranian parliamentary speaker Mohammad Bagher Ghalibaf ruled out a resumption of navigation in the Strait while US sanctions on Iranian ports remained in place, calling the blockade a violation of the ceasefire.
Trump says he has 'all the time in the world' to deal with Iran
Later in the day, Trump remarked that he had “all the time in the world, but Iran desn't," and pointed to alleged “divisions” among Iranian leaders.
Market optimism over a potential agreement between Washington and Tehran last week has now given way to uncertainty amid tightening physical oil supplies, explained Arne Lohmann Rasmussen of Global Risk Management.
Even if both sides reach an agreement, restoring safe navigation through the Strait would depend on addressing critical concerns, including Iran’s alleged deployment of sea mines.
On Thursday, Trump ordered the US Navy to “shoot down” any vessels, regardless of size, suspected of planting mines in the strategic waterway.
