Global oil prices fell by nearly 3% on Thursday as investors reacted positively to a ceasefire agreement between Israel and Lebanon, raising expectations that diplomatic efforts between the United States and Iran could regain momentum. The prospect of easing regional tensions also fueled hopes that the Strait of Hormuz, a critical global oil transit route, could soon reopen to normal shipping activity.
Brent crude dropped $2.82, or 2.9%, to $94.99 per barrel, while U.S. West Texas Intermediate (WTI) crude fell $3.19, or 3.3%, to $92.83. The decline reversed gains recorded a day earlier, when renewed military activity in the Middle East had pushed prices higher.
Market analysts said the ceasefire between Israel and Lebanon improved sentiment, although uncertainty remains. Hezbollah leader Naim Qassem warned that northern Israel would not be secure while attacks on Lebanese villages continued, highlighting the fragile nature of the truce.
Meanwhile, U.S. President Donald Trump suggested progress in negotiations with Iran could emerge as early as this weekend. Iranian Foreign Minister Abbas Araqchi confirmed that communication channels with Washington remain open, though no significant breakthroughs have yet been achieved.
Despite the price decline, analysts noted that restricted oil flows through the Strait of Hormuz continue to support market risks. OPEC also maintained its forecast for strong global oil demand growth despite ongoing geopolitical tensions.
