Global crude oil prices fell more than 1% on Thursday morning after Israel and Lebanon agreed to renew a ceasefire, raising hopes of a broader de-escalation in West Asia.
The decline comes after oil prices had risen nearly 2% in the previous session amid fresh hostilities in the region.
The ceasefire, however, is conditional on the cessation of activities by Iran-backed Hezbollah.
At around 8 am, the August Brent crude contract on the Intercontinental Exchange was trading at $96.67 per barrel, down 1.17% from its previous close. Meanwhile, the July West Texas Intermediate (WTI) contract on NYMEX fell 1.06% to $95.00 per barrel.
According to an Associated Press report, Israel and Lebanon agreed on Wednesday to renew their fragile ceasefire and establish a number of “pilot” security zones inside Lebanon from which the militant group Hezbollah would be barred.
A joint statement issued by the following a fourth round of US-mediated talks in Washington said the ceasefire “is contingent on a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives” from areas south of the Litani River.
Iran talks
According to a Reuters report, US President Donald Trump suggested on Wednesday that could emerge as early as this weekend.
Separately, Iranian Foreign Minister Syed Abbas Araghchi said on Wednesday that Tehran’s contacts with Washington had not been cut off, although no progress had been made in negotiations so far. He added that both sides were studying the texts that had been exchanged.
In another key development, the Republican-led House of Representatives approved a resolution on Wednesday seeking to block Trump from continuing the war against Iran.
However, for the resolution to take effect, it would require Senate approval and two-thirds majorities in both chambers to override a potential Trump veto.
India relief
Reflecting the recent easing in , the Indian crude oil basket stood at $96.12 per barrel as of 2 June, down from an average of $106.23 per barrel in May.
The Indian basket is a derived benchmark comprising the Sweet grade (Brent Dated) and Sour grade (average of Oman and Dubai crude) imported by Indian refineries.