PiCK

Oil Rebounds to About $96 After Iran Claims Hormuz Transit Halted

Source

YM Lee

Summary

WTI crude tumbled after the Middle East conflict and a ceasefire announcement, then rebounded after Iran claimed transit through Hormuz had effectively stopped, trading around $96.
The Strait of Hormuz is a key shipping route that handles about 20%% of global oil flows, and supply concerns alone are putting immediate upward pressure on oil prices regardless of whether an actual blockade is in place.
The market remains cautious about the possibility of a full blockade, but oil could see further gains if military clashes escalate, while gains may be limited if the ceasefire holds and expectations for supply normalization continue.

Forecast Trend Report by Period

International oil prices are rebounding after a steep selloff as tensions in the Middle East flare again.

Trading Economics data on July 9 showed West Texas Intermediate crude surged to near $115 on the Middle East conflict, then fell to the low $90s after a ceasefire was announced the previous day. It later rebounded after Iran claimed transit through the Strait of Hormuz had effectively stopped, with WTI trading around $96.

The latest volatility was driven by Israel's airstrikes on Lebanon and Iran's response. Iran said the strikes violated the ceasefire agreement and claimed vessel traffic through the Strait of Hormuz had effectively been suspended.

The Strait of Hormuz is a critical shipping lane that handles about 20% of global oil flows. Even without a confirmed blockade, the risk of disruption alone can heighten supply concerns and quickly push oil prices higher.

Iran's Revolutionary Guard said some vessels had turned back. Ship movements through the strait also appeared to have slowed sharply.

Still, the market remains cautious about the possibility of a full blockade. With the ceasefire agreement between the U.S. and Iran still in place, hopes for negotiations helped oil erase much of its earlier surge before rebounding.

The market is now highly sensitive to geopolitical headlines. Oil could climb further if military clashes escalate, but gains may be limited if the ceasefire holds and expectations for supply normalization continue.