Oil markets are back on edge, and this time, it’s not because the ceasefire failed but because of what it didn’t cover.
Less than 48 hours after Washington and Tehran agreed to a temporary truce, fresh tensions have emerged over whether the deal extends to Iran’s regional allies, particularly Lebanon. Iran insists it does. The United States says it doesn’t.
That disagreement is already having real consequences. Israel has continued strikes on Lebanon, and Tehran is interpreting that as a breach of understanding, effectively reopening geopolitical risk at a time markets expected calm.
As at the time of writing, 06:45 AM (WAT): Brent crude traded at $96.71 per barrel (+0.82%), while West Texas Intermediate (WTI) stood at $98.31 per barrel (+0.45%).
The rebound in prices tells the story clearly the ceasefire may exist on paper, but the risk premium is creeping back into the market.
Analysts say the initial drop in oil prices after the truce announcement was driven by relief, not fundamentals. Now, reality is setting in. The core supply chain disruptions triggered during the conflict have not been resolved, and the pathway to normalisation remains uncertain.
According to Rystad Energy, what the market is witnessing is a widening gap between paper markets and physical crude supply. While futures reacted instantly to the ceasefire, actual barrels are still facing constraints ranging from shipping delays to elevated insurance costs and cautious tanker movements.
The Strait of Hormuz, a critical artery for global oil flows, remains a major concern. Even with the ceasefire in place, movement through the corridor is still controlled, conditional, and far from full-scale operations. Any escalation tied to Lebanon could quickly tighten access again.
There are also emerging concerns around selective transit and additional charges tied to Gulf routes, a development that traders had already begun pricing in before the ceasefire was announced.
For refiners especially in Asia the situation is becoming increasingly difficult. With Middle Eastern supply still unreliable and Atlantic Basin alternatives uneconomical, buyers are stuck between limited access and high costs, a combination that continues to support higher prices.
Market watchers warn that even if tensions ease, the lag in restoring supply chains cargo movements, vessel scheduling, and refining cycles could take weeks, not days.
In practical terms, the ceasefire has reduced the fear of immediate escalation, but it has not fixed the system. And with the Lebanon angle now threatening to unravel fragile diplomatic ground, oil prices are once again being driven by uncertainty, not stability.