📈 Global Oil Prices Fall as Israel-Lebanon Ceasefire Boosts Diplomacy

Oil prices dipped on Thursday following a ceasefire agreement between Israel and Lebanon, raising hopes for a broader resolution to the U.S.-Israeli war with Iran and a potential reopening of the critical Strait of Hormuz. • Market Impact: Brent futures fell by US$ 1.14 (1.2%) to US$ 96.67 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped 90 cents (0.9%) to US$ 95.12. This reversed a 2% surge on Wednesday triggered by regional hostilities. • Geopolitical Developments: The Lebanon-Israel truce, set to take effect within 24 hours of final approval, marks a potential breakthrough as Iran conditions broader agreements on halting aggression toward Hezbollah. Concurrently, the U.S. House approved a resolution to block the continued war against Iran, though it faces a likely presidential veto. • Supply & Demand Friction: - U.S. crude stockpiles saw a massive draw of 8 million barrels (reaching 433.7 million barrels for the week ended May 29), double the expected 4-million-barrel drop. - Russia officially acknowledged a decline in its oil production since the start of the year due to unplanned refinery maintenance. - Price losses were capped as analysts note the primary trend remains upside while physical flows stay restricted. • Impact on Key Buyers: Sluggish demand from China—a major market for emerging economies—has forced traders to offer discounts on Iranian oil for the first time since April and lower premiums on Russian crude to entice buyers.