Oil rally loses steam after Israel agrees to negotiate with Lebanon
Oil prices were volatile Thursday as the U.S.-Iran ceasefire agreement remained fragile.
ShanonG
U.S. oil prices rose Thursday but pulled back from session highs after Israel agreed to negotiate with Lebanon
West Texas Intermediate crude futures for May delivery gained more than 3% to close at $97.87 per barrel. International benchmark Brent crude futures for June delivery rose more than 1% to settle at $95.92.
U.S. crude oil surged above $100 per barrel earlier in the session, as the market realized that Iran is limiting traffic through the Strait of Hormuz despite the ceasefire agreement with U.S.
The strait has not opened to ships, said the CEO of Abu Dhabi National Oil Company (ADNOC) on Thursday. Iran has made clear that vessels must obtain its permission to pass, Sultan Ahmed Al Jaber said in a social media post.
"That is not freedom of navigation. That is coercion," the ADNOC chief said.
Oil prices since the start of the year
The oil rally subsequently eased after Prime Minister Benjamin Netanyahu said Israel would negotiate with Lebanon "as soon as possible." Israel's military campaign in Lebanon against Iran's ally Hezbollah threatens to unravel the ceasefire between Washington and Tehran.
Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, accused the U.S. on Wednesday of breaching the ceasefire agreement.
"The deep historical distrust we hold toward the United States stems from its repeated violations of all forms of commitments — a pattern that has regrettably been repeated once again," Ghalibaf said in a statement posted on social media.
Ghalibaf said three elements of Iran's 10-point truce proposal had been violated: Israel's ongoing strikes in Lebanon, a drone entering Iranian airspace, and what he described as the denial of Tehran's right to enrich uranium.
U.S. President Donald Trump had said Tuesday stateside that Iran's proposal could serve as a basis for talks. Vice President JD Vance responded to the allegations while on a trip to Hungary on Wednesday.
"Ceasefires are always messy," Vance said, addressing the reported drone incident in Iranian airspace. He added that Washington maintains Iran should not be allowed to enrich uranium, and said any ceasefire covering Lebanon had not been included in the agreement.
