Oil Falls 3% as Ceasefire Hopes Ease Geopolitical Risk
Rendy Andriyanto
Gotrade Team
Reviewed by Gotrade Internal Analyst
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Gotrade News - Global crude oil prices fell roughly 3% as the geopolitical risk premium across the Middle East eased. Brent slid to $95.03 per barrel and WTI dropped to $93.04 per barrel in the latest session.
The decline followed an Israel-Lebanon ceasefire and hopes for an end to the Iran conflict, easing supply fears. Cheaper energy softens inflation pressure, yet it also weighs on the outlook for US energy stocks.
Key Takeaways
Brent fell to $95.03 and WTI to $93.04 per barrel as geopolitical risk faded.
An Israel-Lebanon ceasefire and US-Iran negotiation optimism were the main drivers of the drop.
Hezbollah rejecting the ceasefire terms adds uncertainty to where prices head next.
According to IDX Channel, Brent futures fell 2.84% while WTI weakened 3.1%. Optimism emerged after Israel and Lebanon reached a ceasefire agreement on Wednesday evening.
Iran had earlier set an end to Israel-Hezbollah fighting in Lebanon as a precondition for talks. Markets also weighed the prospect of reopening the Strait of Hormuz, a vital chokepoint for global oil flows.
What Drove the Drop
As reported by Liputan6, President Donald Trump was reportedly unwilling to pursue full-scale war with Iran. A ceasefire that has held for several weeks with Iran remained intact despite sporadic clashes.
A White House official said Trump consistently prefers a diplomatic solution to the crisis. The official stressed there would be consequences if Iran refused to reach a deal.
The cooling tensions lowered the risk premium that had lifted oil prices in recent weeks. Investors now view the threat of Gulf supply disruption as smaller than it appeared before.
Still, the price path is far from settled because the peace negotiations remain fragile. Per Bloomberg Technoz, the Hezbollah militia rejected ceasefire terms announced by the US State Department.
Iran's foreign minister also signaled the talks had stalled amid the latest bout of violence. Trump had called the negotiations final-stage, yet no concrete signs of progress have emerged.
For US equities, cheaper energy delivers a mixed effect across different sectors. Lower fuel costs help airlines and transport firms, while squeezing the margins of oil companies.
The Strait of Hormuz remains a focal point because it carries about a fifth of global oil supply daily. The prospect of reopening this route signals relief for the world's energy supply chain.
Falling crude weighs on the earnings outlook for major producers that are sensitive to commodity prices. Stocks such as Exxon Mobil (XOM) and Chevron (CVX) tend to move in step with crude.
Commodity-linked instruments such as the United States Oil Fund (USO) also track oil price moves directly. For global investors, exposure to US energy names through Gotrade offers a way to diversify amid geopolitical swings.
Going forward, the price trajectory will hinge on whether the ceasefire holds and US-Iran talks continue. Any fresh escalation could restore the risk premium and push oil prices back higher.
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