Markets watch Middle East ceasefire efforts as oil prices fall

Oil prices are falling on global markets today after rising the most in six years on Thursday. Traders are weighing reports of further ceasefire efforts in the Middle East on the one hand and a new ultimatum to Iran from US President Donald Trump on the other, Reuters reported. The most ships since the start of the war passed through the strategically important Strait of Hormuz over the weekend, according to Bloomberg. In peacetime, around a fifth of the world’s oil and liquefied natural gas supplies flow through the strait.

At around 15:00 CEST, North Sea Brent crude was down 0.5 percent at USD 108.48 a barrel. US light crude WTI was down 1.2 percent at USD 110.24 a barrel at the same time.

On the last trading day, Thursday, WTI rose 11 percent and Brent eight percent. This was the biggest absolute price increase since 2020.

Iran has prepared a response to the ceasefire proposal put forward by Pakistan to the United States, Iranian Foreign Ministry spokesman Esmaeil Baghaei said, adding that Tehran has its own demands. He gave no details.

The newly submitted proposal, which Pakistan delivered to Washington and Tehran, calls for an immediate ceasefire and the opening of the Strait of Hormuz, according to Reuters. Subsequent talks are then expected to culminate in an in-person meeting in Islamabad.

Traffic through the Strait of Hormuz reached its highest level since the start of the war over the weekend, as more and more countries strike agreements with Iran for safe passage. Twenty-one ships passed through the route over two days, Bloomberg reported. Governments of countries facing energy shortages are negotiating the removal of vessels, cargoes and crews from the Persian Gulf, strengthening Tehran’s influence over the waterway, Reuters added.

After the US and Israel launched their attack, Tehran effectively blocked the strait. However, several vessels, including an Omani tanker, a French container ship and a Japanese gas carrier, have passed through the Strait of Hormuz since Thursday, shipping data show.

Iran also announced on Saturday that Iraq would be exempt from its restrictions in the strait, which could revive the transport of oil products. Iraq’s state oil marketing organisation also said that traders and refineries could load its oil, citing the fact that ships carrying Iraqi oil can pass freely through the area.

“The market is trying to figure out what it can expect in the future. The most important news this weekend was that some ships passed through (the Strait of Hormuz),” SEB Research analyst Ole Hvalbye told Reuters.

The United States and Israel attacked Iran on 28 February. In retaliation, Tehran and its allies began attacking Israel and Arab states in the region that host US military facilities with drones, ballistic missiles and rockets. Iranian attacks have also targeted civilian sites, including oil infrastructure in neighbouring Arab countries and commercial ships in the Strait of Hormuz.

Oil prices in dollars per barrel (about 159 litres)