Oil prices fall after Israel-Lebanon ceasefire

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Global oil prices eased on Thursday, June 4, 2026, following the announcement of a ceasefire agreement between Israel and Lebanon, which helped cool geopolitical tensions in the Middle East and shifted investor sentiment toward expectations of broader regional de-escalation.

The agreement, announced late on Wednesday, came after a period of heightened volatility in energy markets, where prices had previously surged on renewed conflict risks, including attacks in the region and military activity near strategic shipping routes such as the Strait of Hormuz.

Ceasefire Developments and Geopolitical Context

The Israel-Lebanon ceasefire has raised cautious optimism in markets over the possibility of wider diplomatic progress involving the United States and Iran. However, traders remain cautious as the situation continues to evolve.

· The ceasefire between Israel and Lebanon was announced late Wednesday

· Previous session saw oil prices rise about 2% amid renewed tensions

· Earlier escalation included reported strikes and attacks in the Middle East region

· Markets are watching potential negotiations involving Washington and Tehran

Crude Oil Prices

Oil benchmarks declined during Thursday’s session, according to market data:

· Brent crude futures fell $0.77 (0.8%) to $97.03 per barrel

· U.S. West Texas Intermediate (WTI) crude dropped $0.70 (0.7%) to $95.32 per barrel

· Trading activity remained cautious despite the price decline

Supply and Demand Factors

Market participants also monitored supply and demand signals alongside geopolitical developments.

· U.S. crude inventories fell by 8 million barrels to 433.7 million barrels

· Analysts had expected a smaller decline of around 4 million barrels

· Slowing demand from China continued to weigh on longer-term price expectations

· Price discounts in some crude grades reflected weaker Asian demand trends

Market Outlook Context

Despite the decline, market sentiment remained sensitive to geopolitical risks, particularly around shipping routes and potential disruptions in global oil flows. Analysts noted that supply constraints and regional instability continue to play a key role in price movements.