Ceasefire deadlock concerns overshadow reserve release plans, with oil prices continuing to rise toward the $100 mark

CNBC Finance APP has learned that after another highly volatile trading day, oil prices rose for the second consecutive day. Ongoing escalation of rhetoric regarding the Iran war has sparked concerns about a prolonged conflict, overshadowing the impact of emergency crude oil reserve releases. After nearly a 5% increase on Wednesday, WTI crude oil prices surged by as much as 6.6% today, reaching $93.01 per barrel; Brent crude oil prices hit $98 per barrel. Iran told regional mediators that any ceasefire agreement must require guarantees from the U.S., ensuring that both the U.S. and Israel will not attack Iran in the future. Washington is unlikely to accept these conditions, further diminishing expectations that the war will soon end.

The U.S. announced plans to release 172 million barrels of crude oil as part of coordinated global efforts to cool the market. This move narrowed the gains in oil prices. The released oil will account for nearly half of the U.S. current oil reserves. On Wednesday, combined with U.S. reserves, the International Energy Agency agreed to an unprecedented release of 400 million barrels of oil reserves, far exceeding the production cuts following the 2022 Russia-Ukraine war, causing a brief dip in oil prices.

Nevertheless, the strategic Strait of Hormuz remains effectively closed to shipping, with markets closely watching signs of normal trade resumption. On Wednesday, three ships in the narrow waterway and Persian Gulf were reportedly attacked by unidentified flying objects, highlighting shipping risks.

The Strait of Hormuz is nearly closed, and about one-fifth of the world’s oil typically passes through it. This has led major Gulf oil-producing countries to cut production, pushing up prices of crude oil, natural gas, and diesel. The two-week-long conflict has raised concerns about an inflation crisis. Global daily oil consumption exceeds 100 million barrels, and Gulf producers have had to cut about 6% of their output so far.

Rob Rennie, Head of Commodities Research at Westpac Banking Corporation, said, “With no signs of an end to hostilities and blockades increasing daily, the strait is effectively closed. We still believe Brent crude prices will enter a new higher range of $90–$110 next week.”

On Wednesday, in a speech in Kentucky, Trump reiterated his claim that the war is nearing its end but also hinted that the U.S. will remain stationed until its objectives are achieved. “We don’t want to withdraw prematurely, right?” he told the audience.