Oil prices climbed on Thursday after suffering their steepest one-day drop since April 2020, as disruptions in the Strait of Hormuz persisted and renewed geopolitical tensions in the Middle East clouded the outlook for supply.

As of 05:22 ET (09:22 GMT), Brent Oil Futures expiring in June rose 2.8% to $97.68 per barrel, while West Texas Intermediate (WTI) crude futures climbed 3.3% to $97.50 per barrel.

Both benchmarks tumbled more than 13% on Wednesday after U.S. President Donald Trump announced a temporary ceasefire with Iran.

Israel’s strikes on Lebanon spark ceasefire doubts

Israeli strikes on Lebanon intensified sharply on Wednesday, even after President Trump announced a two-week U.S.-Iran ceasefire on Tuesday.

The continued bombardment has exposed conflicting interpretations of the ceasefire, with Israel indicating its operations against Hezbollah are not covered.

Iran hardened its stance, warning that peace talks with the U.S. would be “unreasonable” under current conditions and accusing Israel of violating the ceasefire.

Iran halted oil tanker traffic through the Strait of Hormuz, delaying any meaningful recovery in global oil flows.

“With a full reopening of the strait unlikely in the near term, oil prices are expected to remain supported, as disruptions linked to reduced output and refinery shutdowns will take time to unwind,” ING analysts said in a note.

Oil prices had tumbled sharply on Wednesday after President Trump announced the ceasefire and vowed that Washington would help ease the traffic around the Strait.

US crude stocks rise to highest levels in 3 yrs – EIA

Data from the Energy Information Administration showed crude stockpiles rose by 3.1 million barrels to 464.7 million barrels in the week ended April 3, the highest level in nearly three years, defying expectations for a roughly 1.0 million-barrel decrease.

In contrast, fuel inventories declined, with distillate stocks — including diesel and heating oil — falling by 3.1 million barrels on strong exports, while gasoline inventories dropped by 1.6 million barrels.