Oil Prices Hold Steady Amid Middle East Tensions and Hezbollah Ceasefire Rejection

SINGAPORE – (Web Desk) – Oil prices showed little movement on Friday after suffering heavy losses in the previous session. The ongoing conflict in the Middle East, combined with a fresh rejection of a ceasefire agreement by Hezbollah, continued to weigh on market sentiment.

Brent crude fell by 21 cents, or about 0.22%, reaching $95.24 per barrel in early Friday trading. This came after a sharp 2.84% drop in the previous session. Meanwhile, US West Texas Intermediate (WTI) crude slipped 10 cents, or 0.11%, to trade at $92.94 per barrel, following a 3.1% decline on Thursday.

Despite the recent dips, both oil benchmarks are on track to record their first weekly gain in three weeks. WTI crude has climbed more than 6% over the week, driven largely by rising tensions in the Middle East and ongoing concerns about oil supply routes.

Hezbollah Rejects Ceasefire, Adding to Market Uncertainty

One of the key reasons behind the market unease is Hezbollah’s refusal to accept a ceasefire deal. Hezbollah leader Naim Qassem rejected a US-brokered agreement on Thursday that was meant to stop the fighting between Israel and Lebanon. Iran has also made it clear that a ceasefire in Lebanon is a must before it agrees to any peace deal with the United States.

US President Donald Trump, however, expressed cautious optimism. He said on Thursday that he believed progress was being made and that Lebanon deserved to have peace.

Strait of Hormuz Closure Keeps Oil Supply Fears Alive

A major factor pushing oil prices higher this week has been the limited traffic through the Strait of Hormuz. This critical waterway handles around one-fifth of the world’s total oil supply. With the strait remaining largely blocked, supply concerns have grown significantly.

Market analyst Tony Sycamore from IG noted that the situation remains unpredictable. He said that optimism in the market is being overshadowed by a constant back-and-forth of conflicting news. From a technical standpoint, he added that as long as WTI crude stays above support levels in the low $80s, the overall price direction is still likely to lean upward.

OPEC Holds Firm on Demand Forecast

Despite the ongoing conflict and disruptions in the Strait of Hormuz, OPEC is standing by its oil demand growth forecast of 1.2 million barrels per day for this year. OPEC Secretary General Haitham Al Ghais confirmed this forecast on Thursday, signaling that the organization believes demand will remain relatively stable.

Analysts have also raised concerns about falling oil inventories around the world, warning that a supply shortfall in the third quarter could trigger a significant price spike.

Iranian oil exports have dropped to their lowest level in six years. The decline is mainly due to a US naval blockade that has restricted shipments. However, weak oil demand from China has helped keep global prices from rising too sharply, partially offsetting the impact of reduced Iranian supply.