A fragile peace agreement is easing supply fears, but traders aren’t out of the woods yet.
Oil prices pulled back Thursday after Israel and Lebanon agreed to implement a ceasefire, lifting market hopes that a wider deal to end the U.S.-Iran war and reopen the Strait of Hormuz could follow.
Key Details
Brent crude slipped 87 cents (0.89%) to $96.92 a barrel, while WTI fell 78 cents (0.81%) to $95.24, giving back part of Wednesday’s roughly 2% rally, which was driven by Iranian strikes on Kuwait and U.S. military action near the Strait of Hormuz.
The ceasefire announcement came late Wednesday. Iran had previously tied any deal with Washington to an end of the Israel-Lebanon conflict, so this development matters. President Trump hinted at potential progress with Tehran as soon as this weekend. Iran’s Foreign Minister confirmed contact with Washington remains open, though negotiations haven’t moved forward yet.
On Capitol Hill, the Republican-led House passed a resolution to halt Trump’s military campaign against Iran, though it still needs Senate approval and a two-thirds majority in both chambers to override a likely veto.
Meanwhile, U.S. crude stockpiles dropped 8 million barrels to 433.7 million in the week ending May 29, double the 4-million-barrel draw analysts had forecast. The IEA warned Tuesday that global inventories could reach critical levels before peak summer demand hits.
Market Reaction
Oil gave back recent gains. Equities and safe-haven assets will likely track ceasefire developments closely.
Why It Matters
The Hormuz Strait controls roughly 20% of global oil flow. Any reopening would ease supply pressure, but ING warns recovery will be slow even if flows resume soon, with inventory tightening likely through Q3.
Watch Next: Weekend Iran-U.S. talks, Senate vote on the war resolution, and weekly inventory data.
Stay ahead of every market-moving headline with QuoMarkets.
