Oil prices saw a slight uptick during Friday’s Asian trading sessions, a consequence of the Iran-backed Hezbollah group’s rejection of a ceasefire proposal between Lebanon and Israel. This development has hindered US-led endeavors to de-escalate the Middle East conflict.
The commodity is on track for a weekly gain, fueled by escalating military tensions in the region. The United States and Iran have engaged in retaliatory airstrikes, while intense clashes persist between Israel and Hezbollah forces in Lebanon.
August-dated Brent crude futures rose by 0.3% to $95.29 per barrel as of 03:19 AM, whereas West Texas Intermediate (WTI) futures added 0.1% to reach $90.05 per barrel.
Hezbollah Rejects Israel Truce, Dampening Peace Hopes
Hezbollah, an Iran-backed group based in Lebanon, on Thursday turned down a ceasefire offer with Israel. The group stated it would not withdraw its forces and condemned the ongoing negotiations between Lebanon and Israel.
Israel continues its airstrikes in southern Lebanon, prompting retaliatory attacks from Hezbollah. Israeli officials have indicated that troops will not be withdrawn from southern Lebanon and that operations will continue, despite a brief pause earlier in the week.
These events have further diminished hopes for a peace agreement between the US and Iran, as Tehran has repeatedly signaled that a Lebanese ceasefire is a prerequisite for any long-term peace accord.
Earlier this week, reports emerged suggesting that Iran had suspended indirect talks with the US, accusing Washington of violating the ceasefire through recent strikes.
The US conducted strikes on several Iranian sites this week, leading to retaliatory attacks by the Islamic Revolutionary Guard Corps on American assets in Kuwait and Beirut.
These strikes occurred even as US officials claimed a peace agreement with Iran was nearing and that negotiations were ongoing. However, there has been minimal observable diplomatic progress with Iran, despite Washington’s assertions to the contrary since at least late March.
Oil Poised for Weekly Gain Amidst Middle East Uncertainty
Brent and WTI futures are set to gain between 3% and 6% for the week, as oil supplies through the Strait of Hormuz remain constrained.
Although US intervention has facilitated an increase in vessel traffic through the strait, the volume of oil shipments is still considerably below pre-war levels.
This trend indicates no imminent improvement in global oil supply, especially considering that approximately one-fifth of global oil consumption transited the Strait of Hormuz before the conflict.
The absence of clear signs of de-escalation suggests that supply disruptions will persist, thereby keeping prices elevated.
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