Oil falls as Lebanon and Israel agree on a ceasefire

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Washington DC: Global oil prices dropped on Thursday after Israel and Lebanon agreed to a ceasefire deal. The breakthrough has raised widespread market hopes for a broader diplomatic agreement to end the U.S.-Israeli war with Iran, which could ultimately lead to the reopening of the strategic Strait of Hormuz shipping lane.

In response to the easing tensions, Brent crude futures declined by 87 cents, or 0.89%, to settle at $96.92 a barrel. Concurrently, U.S. West Texas Intermediate (WTI) crude fell 78 cents, or 0.81%, to reach $95.24 per barrel.

This downturn pared back significant market gains recorded earlier in the week. On Wednesday, both global benchmarks had surged by approximately 2% following a sharp escalation in Middle East hostilities, which included Iranian military attacks on Kuwait alongside retaliatory U.S. airstrikes executed near the Strait of Hormuz.