Oil Nears $100 as Hormuz Disruption Outlasts Ceasefire

Oil prices climbed back toward $100 a barrel on Thursday, while stocks fell and bond markets lurched again, as investors confronted an uneasy reality about the two-week ceasefire between the United States and Iran: even if open fighting has paused, the disruption to one of the world’s most important energy arteries is far from over.

U.S. crude rose to roughly $99.50 a barrel and Brent traded near $98, with some spot cargo prices reflecting even sharper stress, as traders digested signs that tanker traffic through the Strait of Hormuz had not meaningfully recovered. Shipping analysts said vessels were still moving only in a tightly controlled, high-risk environment, with no clear timetable for a return to ordinary commercial patterns. The backlog of delayed cargoes, they warned, could take weeks to clear, and a fuller normalization of trade could take months.

That distinction — between a diplomatic ceasefire and a functioning supply route — is now driving the global economic story.

The initial relief that swept through markets after President Trump announced a ceasefire with Iran this week has begun to fade. European shares retreated on Thursday, Asian markets fell, and the S&P 500 gave back part of its earlier rally as doubts spread about how durable the truce really is. Iranian officials accused Washington of violating elements of the agreement, adding to fears that the conflict could flare again even as shipping insurers, tanker operators and commodity buyers remain wary of sending cargoes through the narrow waterway.

The Strait of Hormuz carries a significant share of the world’s seaborne oil and gas exports, linking Persian Gulf producers to customers in Asia, Europe and beyond. Since the war expanded in late February, the chokepoint has become a source not just of military tension but of broad economic strain. Even after the ceasefire announcement, shipping monitors reported limited traffic and what they described as an Iranian-controlled corridor rather than a return to normal internationally recognized transit arrangements. Rules for passage, fees and long-term security remain unclear.

The result is an energy shock that is spreading well beyond crude markets.

In the United States, the timing is especially uncomfortable for the Federal Reserve. Fresh inflation data showed that before the latest jump in fuel prices had even filtered through the economy, the Fed’s preferred gauge of price pressures was already proving stubborn. The personal consumption expenditures index rose 2.8 percent in February from a year earlier, while core PCE, which strips out food and energy, was 3 percent. Minutes from the Fed’s recent meeting showed officials still expected a rate cut this year, but they also emphasized the need to remain nimble as the Middle East conflict introduced new upside risks to inflation.

That uncertainty has contributed to violent swings in government bond markets, where investors are trying to weigh two opposing possibilities: that higher energy costs will keep inflation elevated and delay rate cuts, or that a prolonged shock will weaken growth badly enough to force central banks to ease anyway. The 10-year Treasury yield hovered around 4.3 percent on Thursday, but the steadiness masked the larger mood of unease. Across major markets, volatility has become a defining feature.

In Europe, the pressure is showing up through energy costs and inflation expectations. The region is less directly dependent on Gulf oil than many Asian economies, but it remains vulnerable to imported fuel shocks after years of energy upheaval. Higher oil and gas prices threaten to complicate the European Central Bank’s path just as businesses and households were hoping for calmer conditions.

Asia faces the sharper immediate test. Many of the region’s economies are more reliant on imported oil, liquefied natural gas and petrochemicals moving through Hormuz, and the current disruption is reviving uncomfortable memories of past balance-of-payments stress. Economists say the situation differs in important ways from the Asian financial crisis of 1997 — exchange-rate regimes are more flexible, foreign-exchange reserves are generally deeper, and banking systems are stronger — but the vulnerability to a sustained commodities shock is real.

India, in particular, is feeling the war’s effects across several fronts at once. Higher fuel costs are squeezing exporters, including garment manufacturers already dealing with tariff pressure, while farmers are growing anxious about shortages of fertilizer and rising input costs ahead of key planting periods. Because the Gulf is not only an energy hub but also central to trade in petrochemicals and fertilizer feedstocks, the disruption is beginning to touch food systems as well as freight bills.

In Australia, the consequences have turned tangible. Fuel supplies have tightened enough that hundreds of service stations have reportedly run dry, especially in regional areas, pushing the government to release stockpiles, cut fuel excise taxes and seek alternative shipments from the United States, Mexico and Asia. Diesel prices have surged, creating added strain for trucking, mining and agriculture. What might once have seemed like a distant geopolitical crisis is now visible at the pump.

Air travel is adjusting, too. Airlines that suspended Middle East service during the fighting are moving cautiously, with some planning reduced schedules even when routes resume, reflecting continuing uncertainty over regional airspace and demand.

For oil traders, the biggest question is no longer simply whether missiles stop flying. It is whether commercial confidence can be restored. Tanker owners, insurers and cargo buyers need predictable rules, lower risk premiums and clear evidence that ships can transit safely through recognized channels. Without that, the ceasefire may cap the worst-case scenarios without repairing the underlying damage.

That helps explain why prices have remained elevated even after the most immediate fears of a wider regional war receded. The physical market is still constrained. Cargoes are stranded or delayed. Insurance and freight costs are higher. And any suggestion that mines, informal controls or political leverage could remain in place around Hormuz is enough to keep risk embedded in prices.

For central bankers and finance ministers, the stakes are rising by the day. If the shock fades quickly, the episode may leave behind little more than a temporary burst of inflation and a sharp reminder of the world’s exposure to geopolitical chokepoints. But if tanker flows remain impaired into late spring, the effects could broaden further — into consumer prices, industrial supply chains, airline schedules, farm inputs and growth forecasts.

The panic that accompanied the height of the war has eased. What has replaced it is, in some ways, harder for markets to absorb: not catastrophe, but instability; not closure, but obstruction; not peace, but a narrow and fragile pause that leaves the global economy exposed.