Oil rebounds as Iran accuses US of truce breach, supply risks rise

Oil prices rose on Thursday after renewed doubts over the tentative two-week US-Iran ceasefire revived concerns about disruption to Middle East energy supplies.

The rebound followed a sharp sell-off in the previous session, when crude fell below $100 on hopes the truce would reduce the risk of wider conflict and help restore flows through the Strait of Hormuz.

Brent was up about $2.60 to $97.35, while WTI surged about $3.02 to $97.43.

Oil prices rebound after steep losses

The recovery in oil came after a volatile stretch in which markets swung sharply between relief over the ceasefire and concern that it may prove short-lived.

Investors had initially welcomed the two-week pause in hostilities as a sign that both sides might step back from a confrontation that had threatened a key oil-producing region and one of the world’s most important shipping routes.

That optimism faded after Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, accused Washington of breaking the terms of the truce.

According to comments reported by CNBC, Ghalibaf said the US had failed to uphold parts of the agreement, prompting traders to reassess whether the ceasefire could hold long enough to stabilise flows and calm the oil market.

What triggered the move

The latest rise in crude prices reflected how sensitive the market remains to any sign of renewed tension.

Even after the previous day’s steep decline, traders were reluctant to conclude that the threat to supply had fully passed, particularly given the strategic importance of the Gulf and the risk that any fresh confrontation could affect shipping or production.

Ghalibaf accused Israel of carrying out strikes in Lebanon, sending a drone into Iranian airspace and blocking Iran’s right to enrich uranium, describing all three as violations linked to the truce.

Whether or not those claims lead to direct retaliation, the market reaction showed that investors remain wary of a ceasefire that is already showing signs of strain.

How Washington responded

US officials sought to play down the significance of the disputes while signalling that the ceasefire was never expected to be seamless.

Vice President JD Vance said on Wednesday that “ceasefires are always messy”, after reports emerged of an Iranian drone targeting an American unmanned aircraft system in Syria.

Vance also said Washington’s position remained that Iran should not be allowed to enrich uranium, underlining that core disagreements between the two sides remain unresolved.

That left investors with little confidence that the current pause in fighting would quickly lead to a broader political settlement.

What analysts are watching

Analysts said the next move in oil will depend less on the headline bounce and more on whether refiners and producers respond to the recent volatility by adjusting buying patterns.

Rystad Energy said oil prices below $100 a barrel could offer refiners a window to rebuild inventories more opportunistically after a period of sharp swings.

At the same time, some analysts cautioned that any price correction may be limited in a market that remains tightly supplied.

Hemang Shah of Edelweiss Securities said refiners were unlikely to buy aggressively until prices fell more materially, while warning that even a de-escalation can leave the market exposed when spare supply is limited and inventories remain thin.

For oil markets, the broader message is that geopolitical risk remains firmly in focus.

The ceasefire may have reduced the immediate threat of disruption, but allegations of breaches by either side have kept traders on edge and preserved a risk premium in crude.

That means daily headlines are likely to continue driving price action.

Oil may have staged a tentative rebound on Thursday, but unless the truce proves durable and supply concerns ease more convincingly, the market is likely to remain volatile and highly reactive to every shift in the conflict.