By: Economy Middle east

Oil prices climbed on Thursday as uncertainty surrounding the fragile two-week Middle East ceasefire renewed concerns that energy shipments through the vital Strait of Hormuz could remain constrained.

As of 5:05 GMT, Brent crude futures gained $2.70, or 2.85 percent, to $97.45 a barrel, while U.S. West Texas Intermediate crude advanced $3.55, or 3.76 percent, to $97.96 a barrel.

Both benchmarks had dropped below $100 a barrel in the previous session, with WTI posting its sharpest fall since April 2020, after early hopes that the ceasefire would lead to the reopening of the strait.

Investors remain uncertain ahead of U.S.-Iran talks

Market participants are still cautious about fully factoring out the geopolitical risk premium, as uncertainty remains over how any negotiations between the U.S. and Iran could affect oil flows and prices. Analysts also believe the prospects for a meaningful reopening of the Strait of Hormuz in the near future remain low.

The strategic waterway links oil and gas exports from Gulf producers, including Iraq, Saudi Arabia, Kuwait and Qatar, to international markets, and normally handles about 20 percent of global supply. But the durability of the ceasefire remained uncertain, as Israel continued its attacks on Lebanon on Wednesday, prompting Iran to say it would be unreasonable to move ahead with talks on a lasting peace agreement.

Shippers also said on Wednesday that they needed greater clarity on the ceasefire terms before restarting transit through the Strait of Hormuz. Iranian media reported that Iran had issued navigational maps to help vessels avoid mines in the waterway and had identified secure passage routes in coordination with the Revolutionary Guards.

U.S. and Iranian officials are scheduled to meet in Pakistan later this week, though the main focus of the talks and further details surrounding the ceasefire remain unclear.

Goldman Sachs lowers Q2 2026 oil price expectations

On Wednesday, Goldman Sachs lowered its second-quarter 2026 forecasts for Brent and U.S. crude to $90 and $87 a barrel, respectively, after the United States and Iran agreed to a two-week ceasefire.

The bank had previously projected Brent and West Texas Intermediate crude to average $99 and $91 a barrel, respectively.

Brent crude has fallen more than 11 percent so far this week on hopes that the Strait of Hormuz would reopen after U.S. President Donald Trump agreed to a two-week ceasefire with Iran.

Still, oil prices moved higher on Thursday as concerns persisted that supply from the key Middle East producing region may not fully recover, given uncertainty over whether the ceasefire will hold, and with the vital strait still under restrictions.

Goldman Sachs left its third-quarter forecast unchanged at $82 a barrel for Brent and $77 for WTI, while its fourth-quarter projections also remained intact at $80 for Brent and $75 for WTI.