Oil prices settled around 3% lower on Thursday following a ceasefire agreement between Israel and Lebanon, raising hopes for a U.S.-Iran deal that could reopen the Strait of Hormuz. Brent futures closed down $2.78, or 2.84%, at $95.03 per barrel, while U.S. West Texas Intermediate crude fell $2.98, or 3.1%, to $93.04, according to livemint.com.
The ceasefire deal between Israel and Lebanon was announced late Wednesday, easing tensions in the region and boosting investor optimism about a potential resolution to the U.S.-Israeli conflict with Iran. Iran has conditioned any agreement partly on an end to fighting between Israel and Hezbollah, an Iran-aligned group in Lebanon. Market participants responded by pricing in the likelihood of resumed oil flows through the Strait of Hormuz, a critical chokepoint for global oil supplies, per livemint.com.
The oil market's reaction underscores the geopolitical sensitivity of supply routes in the Middle East, where conflicts often disrupt crude exports and drive price volatility. The recent price drop reflects expectations that a diplomatic breakthrough could stabilize supply and ease concerns about shortages. Brent and WTI prices had surged earlier amid the conflict, but the ceasefire and potential Iran deal have shifted market sentiment, according to livemint.com.
Brent crude's settlement at $95.03 and WTI's at $93.04 mark a notable retreat from recent highs, reflecting renewed hopes for peace in the region. The ceasefire announcement on June 3 and subsequent market moves highlight the close link between Middle East diplomacy and global energy prices, as reported by livemint.com.