A view of oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia, on June 4, 2023.
Alexander Manczuk | reuters
Oil prices fell after US President Donald Trump said Israel and Lebanon had agreed to a 10-day ceasefire following talks in Washington.
American crude oil Futures for May delivery fell 1.45% to $93.32 a barrel. international benchmark brent June delivery fell 1.11% to $98.36 a barrel.
The ceasefire is scheduled to begin at 5 p.m. ET, Trump said in a Truth Social post. He said Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House for what he described as the first meaningful talks between the two countries since 1983.
The US State Department said both sides aim to create conditions for lasting peace, including mutual recognition of sovereignty. The department said the effort includes improving border security and reaffirming Israel’s right to self-defense.
It also noted shared concerns over non-state armed groups undermining Lebanon’s sovereignty.
Trump said he hoped Lebanon would “take care of Hezbollah,” the Iran-backed terrorist group. This development has raised hopes for a comprehensive solution to the Middle East conflict that started on February 28.
ING said oil prices were being pushed lower on expectations that the US and Iran could extend their ceasefire for another two weeks and potentially resume talks to end the conflict.
“However, without the resumption of oil flows through the Strait of Hormuz, the physical market is becoming tighter every day,” ING analysts said in a note.
Even taking into account pipeline diversions and limited tanker movement, ING estimates about 13 million barrels per day of supply has been disrupted, a figure that could rise further under the US blockade.
“The key risk to the market is that peace talks between the US and Iran break down. This is not an unrealistic scenario, given that the US and Iran’s demands are far apart.”
