Brent Rises 2.3%, WTI Jumps 3.5% as Fragile US-Iran Truce Lifts Oil

Oil prices resumed their climb as a ceasefire agreement between the US and Iran showed signs of fraying.

Bloomberg reported that as of 3:46 p.m. on July 9, Brent crude futures, the international benchmark, were up 2.31% from the previous close at $96.97 a barrel. West Texas Intermediate futures gained 3.46% to $97.61 a barrel.

The rebound followed a dramatic agreement by the US and Iran on July 7 to a two-week ceasefire. In the aftermath, oil prices tumbled as much as 19% intraday, pushing both Brent and WTI futures below $100 a barrel.

Oil came under renewed upward pressure after Washington and Tehran each warned on July 9 that the other side was violating the deal, fueling fresh tensions.

Bloomberg also pointed to the failure to resume traffic through the Strait of Hormuz, which handles about 20% of global crude shipments. Even after the ceasefire agreement, vessel movements through the strait remain restricted, with many tankers and cargo ships still waiting nearby.

"The situation is not over yet," Dennis Kissler, senior vice president at BOK Financial Securities, told Bloomberg. For WTI to fall to the low $80s, he said, the Strait of Hormuz would have to reopen fully without any obstacles.

He added that he does not expect such a full reopening within the next two weeks.

The US and Iran are already sparring over implementation a day after agreeing to the ceasefire, which was premised on reopening the Strait of Hormuz.

Iran has pushed back in particular over Israel's continued attacks on Hezbollah, the Iran-backed armed group in Lebanon, calling them a violation of the agreement.

The US and Iran are scheduled to hold talks on ending the war in Islamabad, Pakistan, beginning July 11. But a swift agreement looks difficult given wide gaps over key issues including uranium enrichment and control of the Strait of Hormuz.

Ko Jung-sam, Hankyung.com reporter, jsk@hankyung.com