- Israel begins a major bombardment of Lebanon.
- Tehran threatens to resume hostilities.
- Iranian official cites multiple US violations.
Oil prices rose and stocks fell on Thursday on fears of the beginning of a cease-fire between the United States and Iran after Tehran threatened to resume hostilities after Israel launched a major bombardment of Lebanon.
Global stock markets rallied and crude fell on Wednesday after US President Donald Trump announced a two-week halt in the war and the Islamic Republic said it would reopen the Strait of Hormuz as peace talks took place.
But with the deal less than a day old, there were already fissures as Tel Aviv said it did not cover Israel’s fight against Iran-backed Hezbollah in Lebanon as it continued attacks on its northern neighbor.
That view was echoed by Vice President JD Vance, who said: “If Iran wants to let this negotiation fall apart…over Lebanon, which has nothing to do with them and which the United States has never once said was part of the ceasefire, that is ultimately their choice.”
Iran said it was breaking the terms of the deal when reports said the vital Hormuz waterway – through which a fifth of the world’s oil and gas passes – was closed again. However, it came as Tehran announced alternative routes for ships sailing through the strait, citing the risk of sea mines.
The country’s speaker of parliament, Mohammad Bagher Ghalibaf, wrote on X that “the workable basis on which to negotiate” had already been violated, making further negotiations “unreasonable”.
He cited three alleged U.S. violations of the cease-fire plan: the continued attacks in Lebanon, a drone that penetrates Iranian airspace and a denial of the country’s right to enrichment.
Hezbollah said on Thursday it had fired rockets at Israel in response to its “violation”.
Meanwhile, a senior US official said Tehran’s 10-point plan was not the same set of conditions the White House had agreed to.
Fears that the truce could fall apart while crude remains stuck in Hormuz saw West Texas Intermediate oil jump about three percent on Thursday, after plunging more than 16% the day before. Brent rose more than two percent after falling 13%.
Stocks also gave up some of their gains.
Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul and Taipei were all down.
Attention is also focused on crunch talks in Pakistan, which are expected on Friday or Saturday, with Vance leading the US delegation.
“Many questions remain with the 10-point plan Trump has received from Iran (which includes Iranian control of the Strait of Hormuz, US acceptance of Iran’s uranium enrichment program, the end of all sanctions and the withdrawal of the US military from the Gulf region) at odds with Trump’s 15-point peace plan,” National Australia Bank’s Skye Master wrote.
Still, observers warned that an end to the conflict would not see a quick return to normal, with crude oil prices still elevated and key regional infrastructure targeted, which could take billions of dollars and at least months to repair.
Shipping journal Lloyd’s List estimates that around 800 ships have been stuck in the Gulf since the end of February, when hostilities broke out.
Still, FOREX.com analyst Fawad Razaqzada said: “Investors are confident that oil prices may ease further and that the Strait of Hormuz will reopen and hopefully remain open beyond the two-week ceasefire period.”
