Oil Prices Rise as Hezbollah Rejects Israel Ceasefire
Oil prices climbed in Asian trade on Friday after Iran-backed Hezbollah rejected a proposed ceasefire between Lebanon and Israel, casting doubt on U.S.-brokered peace efforts in the Middle East.
Crude Heads for Weekly Gains
Crude oil futures were poised for weekly gains amid escalating military tensions. The U.S. and Iran have engaged in airstrikes, while fierce fighting between Israeli forces and Hezbollah continued in southern Lebanon. Brent oil for August rose 0.8% to $95.75 per barrel, and West Texas Intermediate (WTI) crude increased 0.5% to $90.47 per barrel by 23:05 ET (03:05 GMT).
Hezbollah Rejects Ceasefire
Hezbollah announced it would not withdraw troops from Lebanon and condemned ongoing Lebanon-Israel negotiations. Israel maintained airstrikes in southern Lebanon, prompting retaliatory attacks from Hezbollah. Israeli officials indicated that forces would continue operations in the region, signaling no immediate de-escalation.
Impact on U.S.-Iran Peace Efforts
The rejection of the Lebanon ceasefire further diminished prospects for a broader U.S.-Iran peace deal. Tehran has emphasized that a Lebanon ceasefire is essential for any lasting agreement. Reports earlier in the week indicated Iran had halted indirect talks with the U.S., citing violations of a ceasefire through recent attacks. The U.S. responded with targeted strikes in Iran, leading to retaliatory actions by the Revolutionary Guard against American positions in Kuwait and Beirut.
Oil Supply and Weekly Outlook
Brent and WTI futures were set to gain 3%–6% for the week as oil flows through the Strait of Hormuz remained below pre-war levels. While U.S. interventions slightly increased ship crossings, global oil supply improvements were limited. With roughly one-fifth of global oil consumption passing through Hormuz prior to the conflict, ongoing war tensions are expected to continue supporting oil prices.
