Gaza City: Global oil markets witnessed a modest decline on Friday, following a sharp drop in the previous session, as investors reacted positively to the easing of geopolitical tensions in the Middle East. The market's risk premium, which had surged amid fears over the ongoing conflict in Gaza, has started to diminish after Israel and Hamas agreed on the first phase of a ceasefire plan.
Brent crude futures fell by 66 cents, or roughly 1%, to trade at $64.56 per barrel at 10:16 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude dropped 61 cents, also about 1%, settling at $60.90 per barrel. These movements reflect market relief after weeks of uncertainty that had pushed oil prices higher.
“Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit,” said Bjarne Schieldrop, chief commodities analyst at SEB. He noted that the initial agreement could help ease fears regarding the safe passage of crude carriers through the Suez Canal and the Red Sea, two crucial arteries for global oil transport.
Analysts say that while the ceasefire agreement is only the first phase, it has already helped reduce the premium that traders typically attach to oil from conflict-prone regions. The news brings temporary relief to oil markets, though experts caution that sustained stability will be necessary to maintain lower price pressures.
The recent drop marks a shift in market sentiment, as traders weigh the potential impact of improved regional security against ongoing global supply-demand dynamics. With geopolitical uncertainties easing, attention may now turn to production levels, inventory reports, and broader economic indicators that influence oil prices worldwide.