Oil Prices Surge 1% as Strait of Hormuz Closure Fuels Ceasefire Doubts

The international benchmark Brent crude futures rose as much as 1.13 per cent to $97.01 per barrel, while US West Texas Intermediate (WTI) traded at $99.24 in early trade, up 1.39 per cent.

Oil prices slipped to nearly 20 per cent below the $100-per-barrel mark on Wednesday, after averaging that level since February 28.

On the Multi Commodity Exchange (MCX), crude oil futures for April 20 delivery were trading at Rs 9,222 around 10 am, up Rs 289 or 3.23 per cent intraday.

The resurgence in prices comes as doubts emerge over the US-Iran ceasefire, with Israel continuing strikes in Lebanon. Iran has also closed the Strait of Hormuz, while shippers have said they require greater clarity on the ceasefire terms before resuming transit through the key route.

Trump cautioned that failure to adhere to the terms could trigger military action on a much larger scale, though he added such an outcome remains unlikely. He reiterated that Iran would not be allowed to possess nuclear weapons and that the Strait of Hormuz would remain open and secure, with US forces on standby.

Shipping activity through the Strait of Hormuz remained severely disrupted, operating at less than 10 per cent of normal levels on Thursday.

Looking ahead, the Asian Development Bank (ADB) said oil prices are likely to remain elevated in the near term but could gradually stabilise if geopolitical tensions ease.

On the domestic equities front, Indian benchmarks Sensex and Nifty were trading with a gain of 1 per cent in early trade on Friday.

- IANS