''A Day In The Life Of Oil'': When The War Ends... And Not Really!

Friday was the kind of day that explains why oil traders age quickly.

The morning began with what looked like the end of a major geopolitical crisis. The US-Iran peace deal took effect, the Strait of Hormuz reopened, and tankers that had been stranded for weeks finally began moving. Kuwait lifted emergency restrictions, Iraq prepared to restore production, and markets suddenly saw a future with more oil and fewer disruptions.

The reaction was swift. Brent crude slid to $77.69 a barrel as traders celebrated the return of supply and stripped out the war premium that had built up during the conflict.

Then came the awkward part.

The Swiss talks that were supposed to formalise the peace deal were abruptly cancelled. Suddenly, the agreement looked less like a lasting settlement and more like a ceasefire still searching for signatures.

As traders digested that news, fresh reports emerged from Lebanon, where fighting between Israel and Hezbollah continued. The prospect of a wider regional conflict was back on the table.

The market promptly changed its mind.

By afternoon, traders were buying back the same risk they had sold just hours earlier. Brent recovered to around $78.31 a barrel while WTI climbed back above $76.

In the span of a single trading session, oil went from pricing in peace to pricing in the possibility that peace might not actually happen.

If the morning was a wedding announcement, the afternoon was learning that the venue had been cancelled and the families were still negotiating the guest list!