Brent crude fell below $95 per barrel on Thursday as easing tensions in the Middle East and growing expectations of diplomatic progress between Washington and Tehran reduced concerns over potential supply disruptions, lowering the geopolitical risk premium in oil markets.
International benchmark Brent crude traded at $94.73 per barrel at 3.37 p.m. local time (1237 GMT), down about 3.1% from the previous session’s close of $97.81.
US benchmark West Texas Intermediate (WTI) traded at $92.75 per barrel, down around 3.4% from its previous close.
Oil prices came under pressure as optimism surrounding the implementation of a ceasefire between Israel and Lebanon combined with expectations of a diplomatic breakthrough between Washington and Tehran.
Lebanese President Joseph Aoun said implementation of the ceasefire agreement with Israel could begin within 24 hours once final approval is secured and all parties provide the necessary guarantees.
Aoun said the outcome of the fourth round of talks in Washington and the joint statement issued afterward represented the “last opportunity” to reach a comprehensive and lasting ceasefire.
– Anticipation of ceasefire push prices down
Growing expectations of a ceasefire along the Israel-Lebanon border helped ease concerns over regional supply risks, weighing on crude prices.
Prices also faced pressure after the US House of Representatives approved a war powers resolution aimed at ending military operations against Iran, while prospects for diplomatic engagement between Washington and Tehran continued to improve.
Support from four Republican lawmakers alongside Democrats signaled limited backing within US President Donald Trump’s own party for prolonging confrontation with Iran. Markets viewed the move as reducing the risk of further escalation in the region.
Consideration of similar legislation in the US Senate reinforced perceptions that anti-war sentiment is gaining traction in Congress, easing investor concerns over possible supply disruptions.
Meanwhile, Iranian Foreign Minister Abbas Araghchi said contacts with the US are continuing, although no tangible progress has yet been achieved in negotiations.
However, remarks indicating that diplomatic channels remain open, coupled with Trump’s assertion that an agreement could be reached by the weekend, supported expectations of a potential deal.
Additional downward pressure came from a Wall Street Journal report citing US officials who said Trump believes the parties are close to an agreement that would include reopening the Strait of Hormuz, ending Iran’s nuclear activities and eliminating enriched uranium stockpiles.
The reports strengthened expectations that oil shipments through the Strait of Hormuz could continue without interruption and that regional supply risks may ease further, adding downward pressure on prices.
