Global Oil Markets React to Lebanon-Israel Ceasefire Deal
Oil prices fell Thursday as a ceasefire between Israel and Lebanon fueled optimism for a broader agreement to end the US‑Israeli war with Iran, potentially leading to the reopening of the Strait of Hormuz.
Brent crude dropped 87 cents to $96.92 a barrel, while US West Texas Intermediate fell 78 cents to $95.24, paring earlier weekly gains.
Israel and Lebanon agreed late Wednesday to implement a ceasefire, raising hopes for a deal between Washington and Tehran. Iran has conditioned any agreement partly on an end to fighting between Israel and Lebanon. US President Donald Trump suggested progress in negotiations could come as soon as this weekend.
Despite the price dip, market tightness persists. US crude stockpiles fell by 8 million barrels last week, far more than analysts expected. The International Energy Agency warned that global inventories could hit critical levels ahead of peak summer demand if current drawdowns continue.
“Even if we see an imminent restart of oil flows through the Strait of Hormuz, the recovery will be slow and gradual,” ING noted, suggesting upside risk to prices remains.
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