United States: Global oil prices fell on Thursday after Israel and Lebanon agreed to implement a ceasefire, raising hopes that a broader diplomatic breakthrough between the United States and Iran could help ease tensions in the Middle East and eventually restore normal shipping through the Strait of Hormuz.
Brent crude futures dropped 0.89% to $96.92 per barrel, while US West Texas Intermediate crude fell 0.81% to $95.24, reversing part of the gains recorded earlier in the week. Both benchmarks had risen about 2% on Wednesday amid renewed hostilities, including reported Iranian attacks on Kuwait and US military strikes near the Strait of Hormuz.
Market sentiment improved after Israel and Lebanon announced a ceasefire agreement, boosting expectations for progress in negotiations between Washington and Tehran. US President Donald Trump said talks with Iran were proceeding well and suggested a breakthrough could be possible as early as this weekend.
Despite the optimism, Iranian Foreign Minister Abbas Araghchi said contacts with Washington remain open but acknowledged that no significant progress has been achieved, with both sides continuing to review exchanged proposals.
Meanwhile, the US House of Representatives approved a resolution seeking to block further military action against Iran. The measure would still require Senate approval and enough votes to override a likely presidential veto before becoming law.
Oil market fundamentals also remained supportive after the US Energy Information Administration reported an 8 million-barrel decline in crude inventories, nearly double analysts’ expectations. The International Energy Agency has warned that global oil stockpiles could come under increasing pressure ahead of peak summer demand if current inventory drawdowns continue.
Financial markets remained cautious despite lower oil prices. Asian equities declined and Wall Street closed lower as investors weighed renewed military tensions between Washington and Tehran against ongoing diplomatic efforts to secure a lasting regional settlement.