Oil prices turn volatile after Vance warns Israel against breaching Iran ceasefire

U.S. Vice President JD Vance publicly warned Israel not to violate a temporary ceasefire reached with Iran, particularly regarding Israel’s military operations against Hezbollah in Lebanon. The remarks heightened market concerns about renewed escalation in the Middle East, shifting attention to safe passage through the Strait of Hormuz, which carries 20% of global oil shipments. Although a U.S.-Iran memorandum of understanding calls for toll-free transit for 60 days and a gradual restoration of capacity, the arrangement has yet to be implemented and major issues such as Iran’s nuclear programme remain unresolved. With oil prices already near year-to-date lows, the renewed geopolitical risk has lifted the short-term supply risk premium.