Equity markets across the globe soared and crude plunged Wednesday after US President Donald Trump announced the two-week halt in the war, and the Islamic republic said it would reopen the Strait of Hormuz as peace talks took place.
But with the deal less than a day old, cracks were already appearing as Tel Aviv said it did not include Israel's fight against Iran-backed Hezbollah in Lebanon as it continued attacks on its northern neighbour.
That view was echoed by Vice President JD Vance, who said: "If Iran wants to let this negotiation fall apart... over Lebanon, which has nothing to do with them, and which the United States never once said was part of the ceasefire, that's ultimately their choice."
Iran said that broke terms of the deal as reports said the vital Hormuz waterway -- through which a fifth of world oil and gas passes -- was shut again. However, that came as Tehran announced alternative routes for ships travelling through the Strait, citing the risk of sea mines.
The country's parliament speaker Mohammad Bagher Ghalibaf posted on X that the "workable basis on which to negotiate" had already been violated, making further talks "unreasonable".
He listed three alleged US violations of the truce plan: the continued attacks in Lebanon, a drone entering Iranian airspace and a denial of the country's right to enrichment.
Hezbollah said Thursday it had fired rockets towards Israel in response to its "violation", while UN boss Antonio Guterres warned Israel's strikes on Lebanon posed a "grave risk" to the truce.
Trump said on social media late Wednesday that US forces deployed near Iran would remain stationed in the area "until such time as the REAL AGREEMENT reached is fully complied with".
Meanwhile, a senior US official said Tehran's 10-point plan was not the same set of conditions the White House had agreed to.
Fears that the ceasefire could fall apart while crude remains stuck in Hormuz saw West Texas Intermediate oil jump at least three percent Thursday, having plunged more than 16 percent the day before. Brent rose more than two percent following a 13 percent drop.
Equities also gave up some of their gains.
Tokyo, Hong Kong, Shanghai, Singapore, Seoul and Mumbai were all down, though there were gains for Sydney, Taipei, Bangkok and Wellington.
London edged up, while Paris and Frankfurt fell, with US futures in negative territory.
Attention is also turning to crunch talks in Pakistan that are expected on Friday or Saturday, with Vance leading the US delegation.
"Many questions remain with the 10-point plan that Trump has received from Iran (which includes Iranian control of the Strait of Hormuz, US acceptance of Iran's uranium enrichment programme, the end of all sanctions and withdrawal of the US military from the Gulf region) at odds with Trump's 15-point peace plan," wrote National Australia Bank's Skye Masters.
Still, observers warned that an end to the conflict would not see a quick return to normal.
"It should also be noted that there has been significant damage to infrastructure in some major energy exporters," said Anthony Kettle at RBC BlueBay Asset Management.
"Even if the ceasefire holds it will take time for energy exports from the region to return to more normalised levels, so there will be an impact on growth and inflation that is still difficult to ascertain."
Still, FOREX.com analyst Fawad Razaqzada said: "Investors are confident that oil prices could ease further and the Strait of Hormuz will re-open again and hopefully stay open beyond the two-week ceasefire period."
- Key figures at around 0715 GMT -
West Texas Intermediate: UP 3.3 percent at $97.48 a barrel
Brent North Sea Crude: UP 2.3 percent at $96.94 a barrel
Tokyo - Nikkei 225: DOWN 0.7 percent at 55,895.32 (close)
Hong Kong - Hang Seng Index: DOWN 0.4 percent at 25,782.73
Shanghai - Composite: DOWN 0.7 percent at 3,966.17 (close)
London - FTSE 100: UP 0.2 percent at 10.626,30
Euro/dollar: DOWN at $1.1662 from $1.1667 on Wednesday
Pound/dollar: DOWN at $1.3393 from $1.3405
Dollar/yen: UP at 158.79 yen from 158.35 yen
Euro/pound: DOWN at 87.07 pence from 87.22 pence
dan/lga