Oil Prices Decline on Ceasefire Hopes in Middle East
Oil prices declined on Wednesday as diplomatic momentum toward a ceasefire in the Middle East while the market weighed uncertainties in the US Federal Reserve’s rate policy strategies. There are also concerns about the potential effects of Washington’s protectionist trade policies on the global economy, which weigh on market sentiment.
International benchmark Brent crude decreased by around 1.2%, trading at $74.80 per barrel, down from $75.70 at the previous session’s close. Similarly, the US benchmark West Texas Intermediate (WTI) fell by about 1.3%, settling at $72.64 per barrel, compared to $73.60 in the prior session.
The US has reportedly offered a 60-day ceasefire in the Gaza Strip and a prisoner exchange deal with Hamas, reducing geopolitical risk premiums. Israeli media reported that the government is reviewing the proposal, which includes the release of Israeli hostages held by Hamas in exchange for Palestinian prisoners.
While Hamas is said to have accepted the offer, no official statements have been issued by the parties involved. Israeli Prime Minister Benjamin Netanyahu stated on June 10 that “significant progress” had been achieved in ceasefire and prisoner swap negotiations.
Further pressure on prices came after Israel conducted a series of airstrikes on June 13 targeting senior military leadership and sensitive infrastructure, including nuclear facilities, across several Iranian cities. The attacks prompted a new wave of international diplomacy aimed at de-escalating the conflict between Tel Aviv and Tehran.
Egyptian Foreign Minister Badr Abdulati urged restraint during phone calls with US envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi. In Doha, Qatari Foreign Ministry Spokesperson Majid Al-Ansari warned that regional stability “cannot withstand another escalation,” emphasizing the critical importance of safeguarding energy infrastructure.
At a separate press briefing in Beijing, Chinese Foreign Ministry spokesperson Guo Jiakun called on nations with sway over Israel to “act responsibly” and help prevent a broader regional spillover. Meanwhile, macroeconomic uncertainties continued to dampen market sentiment.
Concerns persist over the Fed’s policy trajectory and the broader impact of Washington’s protectionist trade stance. Analysts warn that any renewed spike in oil prices—potentially triggered by Middle East tensions—could reignite inflationary pressures globally.
Although the Fed is widely expected to keep rates unchanged at its policy meeting tonight, the likelihood of a rate cut in September has fallen to 71%, down from previous projections.
A delay in rate cuts, coupled with dollar strength, could further dampen oil demand and reinforce downward pressure on prices. #Oil Prices Decline on Ceasefire Hopes in Middle East Nigeria Boosts Trade Surplus to N5.17trn as Imports Taper
