MW Oil prices rise as concerns about 'fragile' cease-fire see Goldman warn of $115 crude by end of the year
By Jamie Chisholm
Traders are wary that traffic through the Strait of Hormuz is still restricted
U.S. Secretary of Defense Pete Hegseth takes questions during a press briefing at the Pentagon in Washington, D.C., on April 8, 2026. The United States and Iran agreed to a two-week cease-fire on April 7, but tensions remain high.
Oil prices rose again Thursday amid uncertainty a cease-fire between the U.S. and Iran would hold, and concerns shipping was still constrained through the Strait of Hormuz.
Brent crude futures, the global benchmark, and the U.S.-based West Texas Intermediate contract, both saw their biggest one-day percentage decline in almost six years on Wednesday after the U.S. and Iran agreed to a two-week cease-fire.
However, fears have grown that the U.S. and Iran remain wide apart in the conditions necessary for securing a longer-term peace deal, with U.S. President Donald Trump saying military assets will remain in the region until one is agreed. Vice President JD Vance has admitted that the truce is "fragile" as Iran appears to be still insisting it should control shipping through the Strait of Hormuz, the conduit for about 20% of global oil supply.
Consequently, early Thursday trading saw Brent futures for June (BRN00) rising 3.9% to $98.42 a barrel and WTI futures for May (CL.1) adding 3.7% to $97.92 a barrel. Brent remains up around 60% this year and WTI is up about 70%.
Kathleen Brooks, research director at XTB, noted that official data showed only three ships passed through the Strait of Hormuz on Wednesday. "There are approximately 800 rankers waiting around the Strait, which suggests it could be a very long process to get ships flowing through the waterway. This could keep a floor on the oil price for now," Brooks added.
The lingering uncertainty about Middle East oil supplies was reflected in a note from Goldman Sachs published late Wednesday.
The bank's team of commodities analysts led by Daan Struyven said the cease-fire and pullback in oil prices "are largely in line with our baseline expectation that energy flows through the Strait start to recover this weekend, followed by a gradual 1-month recovery in Persian Gulf exports to pre-war levels."
They are keeping their fourth quarter of 2026 forecasts for Brent at $80 and WTI at $75.
But the Goldman team added that they see greater upside risks to their targets if there are longer disruptions and persistent crude production losses in the Persian Gulf region.
"In an adverse scenario where the cease-fire doesn't hold, and SoH reopening is postponed for a month, Brent prices can still average $100 a barrel in 2026Q4 [fourth quarter of 2026] if Persian Gulf production fully recovers to pre-war levels and $115 a barrel in a severely adverse scenario where later reopening is followed by persistent 2 million barrel-a-day Mideast production losses," Goldman said.
-Jamie Chisholm
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(END) Dow Jones Newswires
April 09, 2026 04:20 ET (08:20 GMT)
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