Key Highlights
- Crude benchmarks rallied approximately 3% Thursday following Wednesday’s 13%+ plunge
- Wednesday’s collapse followed Trump’s announcement of a temporary ceasefire agreement with Iran
- Continued Israeli military operations in Lebanon cast uncertainty over the ceasefire’s breadth
- Tehran continues blocking oil tanker passage through the Strait of Hormuz
- Goldman Sachs projects Brent could exceed $100/barrel average if the blockade extends another 30 days
Crude oil markets staged a significant recovery Thursday after experiencing their steepest single-session decline since April 2020. Brent benchmark futures advanced 2.8% to reach $97.68 per barrel, while West Texas Intermediate gained 3.3% to settle at $97.50 per barrel.
Wednesday’s dramatic retreat followed President Donald Trump’s declaration of a 14-day ceasefire arrangement with Tehran. Market participants initially interpreted this development as signaling an imminent resolution to supply constraints.
However, optimism quickly dissipated. Israeli forces proceeded with strikes against targets in Lebanese territory even following the ceasefire announcement, prompting uncertainty regarding the actual parameters of the truce.
Israeli officials clarified that military actions targeting Hezbollah fall outside the ceasefire framework. Tehran rejected this interpretation, characterizing negotiations with Washington as “unreasonable” given present circumstances and accusing Israel of breaching the agreement.
Tehran continues its suspension of oil tanker movements through the Strait of Hormuz. This critical waterway facilitates roughly one-quarter of global seaborne petroleum commerce and has remained substantially closed following the U.S.-Israeli strike on Iran in February.
Goldman Sachs Outlines Multiple Price Trajectories
Analysts from [[LINK_START_2]]Goldman Sachs[[LINK_END_2]] cautioned that an additional month of strait closure could push Brent to average above $100 per barrel during the latter half of 2026.
Their baseline projection assumes shipping activity resumes this coming weekend, with Persian Gulf export volumes returning to pre-conflict levels within 30 days. This scenario places Brent at an $82 average during Q3 and $80 in Q4.
A more pessimistic alternative, incorporating extended closure duration and diminished regional output, positions Brent at $120 during the third quarter and $115 in the fourth.
Goldman’s research team noted that forecast risks are “skewed to the upside.” Vice President JD Vance was similarly quoted characterizing the ceasefire as tenuous.
Trump stated via social media that there had been longstanding agreement that the Strait of Hormuz would remain open and secure for navigation. He indicated that military operations against Iran could restart if terms are violated.
American Crude Inventories Reach Three-Year Peak
The U.S. Energy Information Administration disclosed that domestic crude reserves increased by 3.1 million barrels to 464.7 million barrels during the week concluded April 3. This represents the highest inventory level in nearly three years and substantially exceeded analyst projections of a 1 million barrel gain.
Refined product inventories presented a contrasting picture. Distillate reserves, encompassing diesel and heating oil, decreased by 3.1 million barrels amid robust export activity. Gasoline stockpiles declined by 1.6 million barrels.
Iran’s Ports and Maritime Organization designated two approved safe passage corridors for vessels traversing the strait, both positioned around Larak Island near Bandar Abbas.
ING analysts indicated that complete reopening of the strait remains improbable in the immediate term, with prices anticipated to maintain elevated levels as supply disruptions require considerable time to resolve.
Brent contracts had reached a peak of $119.50 during the crisis’s most intense phase before plummeting sharply Wednesday on ceasefire developments.
