Oil falls 3% as Lebanon ceasefire lifts Iran deal hopes

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2 hours ago

Oil falls 3% as Lebanon ceasefire lifts Iran deal hopes — Oil drops as Iran war fears ease

Oil prices fell about 3% Thursday after reports that President Donald Trump is reluctant to restart a full-scale war with Iran. The decline reflected a shift in market expectations: traders saw a lower chance of immediate escalation, even as clashes continued in the Gulf and the Israel-Lebanon ceasefire remained fragile.

Highlights

Oil fell about 3% after reports that Trump is reluctant to resume full-scale war with Iran.
WTI dropped to $92.87 a barrel, while Brent fell to $95.14.
Israel and Lebanon agreed to a ceasefire framework, but Hezbollah rejected the deal.
U.S. political pressure is rising, with the House passing a war powers resolution aimed at limiting Trump’s Iran authority.

Crude retreats from war premium

West Texas Intermediate crude fell 3.5% to $92.64 a barrel by 8:30 a.m. ET, while Brent, the global benchmark, dropped more than 3% to $94.78.

At the time of writing, WTI crude oil is trading at around $92.87, while Brent crude oil is trading at up to $95.14.

The selling came after oil had risen earlier in the week on renewed U.S.-Iran clashes, including Iranian attacks on Gulf targets and U.S. military strikes near the Strait of Hormuz. A White House official told CNBC that Trump “always prefers a diplomatic solution,” while warning of consequences if Iran refuses to make a deal.

Lebanon ceasefire remains uncertain

The ceasefire between Israel and Lebanon briefly improved hopes for a broader U.S.-Iran agreement, since Tehran has linked progress in talks to an end to Israeli operations against Hezbollah. But the deal looked unstable almost immediately: Hezbollah rejected the latest ceasefire arrangement, saying it would not stop resisting while Israeli forces remained in Lebanon. Israeli strikes continued, killing at least four people, according to local authorities cited by AP.

That uncertainty limits how far oil can fall. Israel and Lebanon had agreed to a ceasefire framework, but fighting continued into Thursday morning, underscoring the gap between diplomatic announcements and conditions on the ground.

Energy markets still face Gulf risk

Oil traders are sensitive not only to attacks but also to signals from Washington about whether the war will expand. If Trump keeps the ceasefire in place, crude could lose some of its geopolitical premium.

The risk is that the market’s relief may prove temporary. Hezbollah is not bound by the Lebanon deal, Israel says it will continue operations where needed, and Iran has not accepted a durable settlement with the U.S. As long as the Strait of Hormuz remains vulnerable and regional strikes continue, oil prices are likely to stay exposed to sudden reversals.

We also reported oil falls as the Israel-Lebanon ceasefire eases Gulf risk.

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