Israel-Lebanon truce fuels optimism for Middle East peace
A view shows oil pump jacks outside Almetyevsk in Russia’s Republic of Tatarstan on June 4, 2023.
Alexander Manzyuk | Reuters
Oil prices fell after US President Donald Trump said the war in Iran “must end very soon” and a ceasefire between Israel and Lebanon raised hopes of easing supply disruptions.
US crude oil Futures contracts for May delivery fell 1.45% to $93.32 per barrel. International comparison Brent June delivery fell 1.11% to $98.36 per barrel.
Trump on Thursday reiterated his hopeful predictions for an end to the war that began on Feb. 28, saying “the war in Iran continues smoothly.”
Hours earlier, Trump had said in a post on Truth Social that the 10-day ceasefire between Israel and Lebanon would begin at 5 p.m.
He added that Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun will 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 ministry said the efforts include improving border security and reaffirming Israel’s right to self-defense.
It also noted common concerns about non-state armed groups undermining Lebanon’s sovereignty.
Trump said he expected Lebanon to “deal with Hezbollah,” the Iran-backed militant group. The developments have raised hopes for a broader solution to the Middle East conflict.
ING said oil prices had fallen on expectations that the United States and Iran could extend the ceasefire for another two weeks and potentially resume negotiations to end the conflict.
“However, with each day that passes without the resumption of oil flows through the Strait of Hormuz, the physical market becomes tighter,” ING analysts wrote in a note. he said.
Even accounting for pipeline rerouting and limited tanker movements, ING estimates that approximately 13 million barrels per day of supply were disrupted; This figure may increase further under the US blockade.
“The most significant upside risk for the market is the failure of peace talks between the United States and Iran. This is not an unrealistic scenario, given that the demands of the United States and Iran are quite different.”
