Oil prices declined on Friday after Israel and Hamas agreed to the first phase of a U.S.-brokered ceasefire in Gaza, easing geopolitical tensions that had supported prices in recent months.
Brent crude traded at $64.66 per barrel at 9:42 a.m. local time (0642 GMT), down 0.5% from the previous close of $64.99, while U.S. benchmark West Texas Intermediate (WTI) slipped 0.5% to $60.82 from $61.16 in the prior session.
The ceasefire agreement, confirmed late Thursday, includes Israeli troop withdrawals, the reopening of the Rafah border crossing, the entry of humanitarian aid into Gaza, and the release of hundreds of Palestinian prisoners.
Hamas said it had received assurances from mediators and the U.S. that the Israeli offensive in Gaza had “fully ended.” In a pre-recorded speech, Hamas leader Khalil al-Hayya confirmed the agreement, saying, “We have received guarantees from our brothers, the mediators, and the U.S. administration, all confirming that the war has ended completely.”
Analysts said the truce eased fears of potential supply disruptions in the global oil market.
“This presents a major step toward ending the two-year war that raised the risk of supply disruptions in the oil market,” said Daniel Hynes, Senior Commodity Strategist at the Australia and New Zealand Banking Group.
He added that the market’s attention has now shifted back to the expected oil surplus as OPEC proceeds with the gradual unwinding of production cuts.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, recently reaffirmed plans to increase production in November. Eight member nations agreed to raise output by 137,000 barrels per day, easing supply concerns and exerting further downward pressure on prices. The group’s next meeting is set for November 2.
However, losses were partially offset after the United States imposed fresh sanctions on more than 90 individuals, entities, and vessels accused of facilitating Iran’s petroleum and petrochemical exports through the UAE, India, China, Hong Kong, and Singapore.
The U.S. Treasury Department said over 50 individuals were designated for enabling billions of dollars’ worth of Iranian oil and liquefied petroleum gas (LPG) exports. The sanctions target several Asian-based networks, nearly two dozen “shadow fleet” vessels, a China-based crude oil terminal, and an independent refinery described as “key to Iran’s ability to export petroleum and petroleum products.”
The U.S. State Department also announced parallel sanctions against about 40 additional individuals and entities tied to Iran’s energy trade, including major petrochemical buyers and operators of shadow fleet tankers.
Treasury Secretary Scott Bessent said the action was part of efforts to choke off Tehran’s oil revenue and disrupt funding for groups threatening the U.S. and its allies.
“Treasury is degrading Iran’s cash flow by dismantling key elements of Iran’s energy export machine,” Bessent stated.
