Oil prices climbed on Friday after fresh doubts emerged over the durability of the U.S.-Iran ceasefire, prompting traders to reassess expectations that the Middle East conflict had been brought under control.
According to Reuters, Brent crude rose 51 cents, or 0.64 percent, to $80.36 a barrel, while U.S. West Texas Intermediate gained $1.28, or 1.7 percent, to $77.88 a barrel.
The rebound came after plans for U.S.-Iran talks in Switzerland were unexpectedly shelved, casting uncertainty over the next phase of negotiations intended to transform a temporary truce into a lasting peace agreement.
Switzerland confirmed that discussions scheduled for Friday would no longer take place, while U.S. Vice President JD Vance reportedly cancelled his planned trip, adding to concerns that momentum behind the diplomatic process may be weakening.
The gains erased early losses and reflected growing market unease that the ceasefire remains fragile despite the agreement signed earlier this week by U.S. President Donald Trump and Iranian President Masoud Pezeshkian.
Analysts said traders are beginning to question whether the deal can survive mounting challenges.
“Cracks have already emerged in the memorandum of understanding,” said Vandana Hari, founder of Vanda Insights, noting that the geopolitical backdrop remains too uncertain for markets to fully embrace a return to normality.
The concerns extend beyond diplomacy.
While the agreement reopened the Strait of Hormuz and triggered the first major tanker movements through the strategic waterway, shipping activity has yet to fully recover. Traders remain cautious about assuming that oil flows have permanently stabilised.
On Thursday, several tankers, including three Saudi supertankers carrying six million barrels of crude, successfully crossed the strait. The development helped push oil prices to their lowest levels since March.
However, market participants are still waiting for clearer evidence that commercial traffic has normalised before betting on further declines.
The agreement is expected to release more than 85 million barrels of oil previously stranded in the Gulf region, while the planned lifting of U.S. sanctions on Iranian oil could further increase global supply.
That prospect has kept oil prices on track for a weekly decline of roughly eight percent despite Friday’s rebound.
Energy producers across the region are already preparing for a return to business as usual.
Kuwait Petroleum Corporation has lifted all force majeure declarations imposed during the conflict, while Iraq says its oilfields are ready to restore production levels gradually to pre-war capacity.
Yet the biggest threat to the deal may lie outside Iran.
Israeli military operations against Hezbollah in Lebanon have continued despite the ceasefire framework, raising questions about whether one of the conflict’s most volatile fronts can be brought under control.
As long as fighting persists in Lebanon and uncertainty surrounds future U.S.-Iran negotiations, analysts expect oil markets to remain highly sensitive to developments across the region.
For now, traders are balancing two competing forces: the prospect of a flood of new oil supply and the risk that a fragile peace could unravel before it takes hold.
