- Israel launches major bombing raids on Lebanon.
- Tehran threatens to resume hostilities.
- The Iranian official cites several US violations.
Oil prices rose and stocks fell on Thursday on fears over the nascent ceasefire between the United States and Iran after Tehran threatened to resume hostilities after Israel launched a major bombing raid on Lebanon.
Stock markets around the world soared and crude oil plunged on Wednesday after U.S. President Donald Trump announced a two-week cessation of the war and the Islamic Republic said it would reopen the Strait of Hormuz while peace talks were underway.
But with the deal less than a day old, cracks were already appearing when Tel Aviv said it did not include 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 never said was part of the ceasefire, that is ultimately their choice.”
Iran said that broke the terms of the deal as reports said the vital Hormuz waterway, through which a fifth of the world’s oil and gas passes, was closed again. However, this came as Tehran announced alternative routes for ships traveling through the Strait, citing the risk of sea mines.
The speaker of the country’s parliament, Mohammad Bagher Ghalibaf, posted on X that the “viable basis on which to negotiate” had already been violated, making future talks “unreasonable.”
He listed three alleged US violations of the truce plan: the continued attacks in Lebanon, the entry of a drone into Iranian airspace and the denial of the country’s right to uranium 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 that the White House had agreed to.
Fears that the ceasefire could fail while crude oil remains stuck in Hormuz sent West Texas Intermediate oil up about three percent on Thursday, after plunging more than 16 percent the previous day. Brent rose more than two percent after a 13% drop.
The stock also gave back some of its gains.
Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul and Taipei fell.
Attention is also focused on crucial talks in Pakistan expected on Friday or Saturday, with Vance leading the US delegation.
“Many questions remain about the 10-point plan Trump received from Iran (which includes Iranian control of the Strait of Hormuz, US acceptance of Iran’s uranium enrichment program, an end to all sanctions and the withdrawal of the US military from the Gulf region) and is at odds with Trump’s 15-point peace plan,” wrote National Australia Bank’s Skye Masters.
Still, observers warned that an end to the conflict would not mean a quick return to normality, with oil prices still elevated and key regional infrastructure in the spotlight that could take billions of dollars and at least months to repair.
Shipping magazine Lloyd’s List estimated that around 800 ships have been stranded in the Gulf since late February, when hostilities broke out.
Still, FOREX.com analyst Fawad Razaqzada said: “Investors are confident that oil prices could decline further and that the Strait of Hormuz will reopen again and hopefully remain open beyond the two-week ceasefire period.”
