By Peter John

Global oil prices climbed on renewed geopolitical tensions after fresh military strikes in Lebanon cast doubt over the durability of a fragile ceasefire between the United States and Iran.

Brent crude, the international benchmark, rose by 2% to $96.53 a barrel, while US-traded West Texas Intermediate gained 2.8% to $97.02, reversing earlier losses recorded after the truce announcement.

The uptick follows Israeli airstrikes in Lebanon, which prompted Tehran to warn of a “regret-inducing response” if the attacks persist. US President Donald Trump has maintained that American forces will remain in the region until Iran adheres to what he termed a “real” ceasefire agreement.

At the centre of market anxiety is the Strait of Hormuz, a critical global oil transit chokepoint. While the ceasefire initially included provisions for reopening the waterway, reports suggesting it may remain closed have reignited fears of prolonged supply disruptions.

Iran’s navy has reportedly warned that any vessels attempting to pass through the strait without permission risk being “targeted and destroyed,” further complicating efforts to restore normal shipping operations.

Maritime data indicates only a fraction of the usual daily traffic—typically around 130 vessels—has resumed since the agreement was announced.

The uncertainty has also rippled across global financial markets. Japan’s Nikkei 225 index closed 0.5% lower, while European markets followed suit, with the UK’s FTSE 100 down 0.4%, Germany’s DAX falling 1.3%, and France’s CAC 40 slipping 0.8%.

Analysts say the volatility reflects deep uncertainty over whether the ceasefire will hold and whether energy flows can stabilise.

Victoria Scholar of Interactive Investor noted that markets are “giving back some gains” amid growing nervousness, particularly around the status of the Strait of Hormuz.

Shipping firms remain cautious. Hapag-Lloyd, which still has vessels in the Persian Gulf, says it is awaiting clear guidance on transit conditions, including the possibility of new fees.

Industry players warn that any additional costs could significantly disrupt global trade, especially if they exceed fees charged at major routes like the Suez or Panama canals.

Meanwhile, the situation on the ground remains fluid. Israel’s latest strikes in Lebanon—reported to be among the heaviest in the current conflict—have raised further questions about the scope of the ceasefire, with Hezbollah responding by launching rockets into northern Israel.

Diplomatic efforts continue, with US Vice President JD Vance expected to participate in negotiations with Iran in Pakistan later this week.

However, with tensions escalating and conflicting signals emerging daily, markets are likely to remain on edge in the near term.