On Thursday (April 9), during the US trading session, Israeli Prime Minister Benjamin Netanyahu announced that he had instructed his cabinet to begin direct negotiations with Lebanon as soon as possible, with the focus on disarming Hezbollah and establishing formal peace relations between the two countries.



This news eased market concerns about the sustainability of the Middle East ceasefire, causing oil prices, which had surged in the morning, to narrow their gains significantly, ultimately rising by about 1%.

Previously, the two-week Middle East ceasefire agreement was at risk of collapse due to Israel's continued bombing of targets in Lebanon, coupled with Iran's strict restrictions on shipping in the Strait of Hormuz, which fueled concerns about supply disruptions.

Oil prices initially surged in early trading, with Brent crude hitting a high of $99.50 per barrel and WTI crude reaching $102.70 per barrel. However, Netanyahu's statements regarding negotiations quickly erased some of these gains.

As of 12:58 p.m. Eastern Time (00:58 Beijing Time), Brent crude futures rose $0.90, or 1%, to $95.65 a barrel; West Texas Intermediate (WTI) crude futures rose about $3, or 3.2%, to $97.39 a barrel.

The previous trading day, both major benchmark crude oil prices fell below $100 per barrel, with WTI experiencing its biggest single-day drop since April 2020, as the market was optimistic that a ceasefire would prompt the rapid reopening of the Strait of Hormuz.

Shipping through the Strait of Hormuz is disrupted, and supply risks remain.

The Strait of Hormuz is a vital waterway for approximately 20% of the world's oil and gas transportation, connecting Gulf oil-producing nations such as Iraq, Saudi Arabia, Kuwait, and Qatar with international markets. Currently, shipping traffic through the strait has fallen to less than 10% of normal levels.

Iran warned ships on Thursday to remain within its territorial waters and issued nautical charts to guide vessels away from minefields, forcing some oil tankers to choose the northern route closer to the Iranian coast. Cargo owners said that normal passage would be difficult to resume until the specific terms of a ceasefire were clarified.

Even as shipping gradually resumes, the risks will not disappear immediately—mine threats, increased military presence, and rising insurance and freight costs will continue to drive up overall transportation costs.

Dennis Kisler, Senior Vice President of Trading at BOK Financial, noted, "Crude oil futures are recovering some of the losses from the previous trading day as traffic in the Strait of Hormuz is far below market expectations. Israel's continued attacks on Lebanon are casting doubt on the ceasefire agreement, while US Vice President Vance is traveling to the Middle East to continue mediation."

Despite the uncertainty, regional oil facilities remain under threat. Iran reportedly attacked facilities in neighboring countries, including an oil pipeline in Saudi Arabia, following the ceasefire. Kuwait, Bahrain, and the UAE have also reported missile and drone attacks.

Crude oil loading activities at the Saudi Red Sea port of Yanbu continue, but overall supply risks have not been completely eliminated.

Goldman Sachs has therefore lowered its oil price forecast for the second quarter of 2026, adjusting its forecasts for Brent crude and WTI crude to $90 and $87 per barrel, respectively, from its previous forecasts of $99 and $91.

The prospects for Israel-Lebanon negotiations are complex.

Direct negotiations between Israel and Lebanon mark a significant shift in their communication methods, which previously relied heavily on intermediaries.

Netanyahu emphasized: "Given Lebanon's repeated requests for direct negotiations, I have instructed that they be initiated as soon as possible, with a focus on Hezbollah's disarmament and the establishment of peace relations."

However, Hezbollah, as an Iranian-backed militia, wields significant military and political influence in Lebanon, and any disarmament plan is likely to face strong resistance. Iran's regional interests also complicate the process. Significant uncertainty remains between the announcement and tangible results.

Geopolitical conflicts affect global macroeconomic policies

This geopolitical turmoil has also impacted global macroeconomic policies. Deutsche Bank analysts believe that the Iranian-related energy crisis has disrupted the Polish National Bank's (NBP) plans to cut interest rates.

Given that oil prices are unlikely to return to normal levels in the short term, the Polish central bank is likely to maintain the current interest rate. Unless oil prices fall below $70 per barrel, the possibility of a rate cut is extremely low.

Geopolitical shocks have led to a shift in monetary policy from a cyclical framework to a reactive one, and the government will continue to implement emergency fiscal measures such as fuel price caps.

Market participants generally believe that the risks will not subside overnight. Even as traffic in the Strait of Hormuz gradually resumes, rising insurance costs and military uncertainties will continue to support oil prices.

The future trajectory will depend on the progress of the Israel-Lebanon negotiations, the actual implementation of the ceasefire agreement, and further consultations between Iran and the West on the issue of passage through the Strait of Hormuz.