International oil prices declined significantly on Thursday, influenced by a de-escalation of geopolitical tensions. At the time of writing, WTI crude had fallen by 3.5% to $92.67 per barrel, while Brent crude was down 3% to $95.17 per barrel.
A report citing anonymous U.S. officials indicated that President Trump has conveyed to his advisors a reluctance to restart a full-scale war against Iran, despite sporadic skirmishes, as a ceasefire has largely held for weeks. This stance has alleviated market concerns about a further escalation of Middle East conflicts.
Separately, President Trump commented at the White House that negotiations with Iran are progressing well and an agreement could be reached by the weekend. He added that once a deal is finalized, the Strait of Hormuz would reopen for navigation "immediately," though a final mine-clearing operation in specific areas would be a prerequisite.
Concurrently, a potential ceasefire agreement between Israel and Lebanon points to a temporary easing of regional tensions. A White House official noted that Trump "has consistently favored a diplomatic resolution" while making clear to Iran the consequences of rejecting a deal. The official added that Trump would consider ending the ceasefire if Iranian actions resulted in U.S. military casualties.
Ceasefire Hopes Between Israel and Lebanon Face Uncertainties
Following a fourth round of high-level trilateral talks in Washington involving the U.S., Israel, and Lebanon, a joint statement announced that Israel and Lebanon have agreed to implement a ceasefire. The agreement is contingent upon Hezbollah completely ceasing fire and withdrawing its armed personnel from areas south of the Litani River in southern Lebanon.
Analysts suggest this ceasefire declaration resulted from U.S. efforts to persuade Israel, aimed at facilitating ongoing negotiations with Iran. In the short term, Israel may scale back its military operations in Lebanon. However, given the Lebanese government's limited control over Hezbollah and Israel's perceived need to maintain military pressure on the group, the implementation and effectiveness of this ceasefire arrangement remain uncertain.
The consensus on a conditional ceasefire was reached against a backdrop where recent escalations in Israeli military actions in Lebanon had caused setbacks in U.S.-Iran talks. Iran has made a Lebanon-Israel ceasefire a precondition for a deal with the U.S. However, over the past week, citing Hezbollah's "violations of the ceasefire," Israel intensified its offensive in Lebanon, advancing deeper and even threatening strikes on Beirut. In response, Iran stated it would suspend dialogue with the U.S., threatening to completely blockade the Strait of Hormuz and open a new front in the Bab el-Mandeb Strait.
Congressional Pressure Mounts with Anti-War Voices in GOP
Simultaneously, Trump faces growing opposition from Congress domestically.
The U.S. House of Representatives passed a resolution to curtail the president's war powers, requiring Trump to end military action against Iran and seek congressional authorization for any future actions. This marks the fourth such vote in the House since the U.S. and Israel initiated military action against Iran in late February, and the first time a related resolution has been passed.
President Trump responded on social media, calling the House members who voted in favor of the resolution "unpatriotic." He noted that four Republicans joined all Democrats in supporting the measure to limit his war powers. He characterized the vote, occurring during final negotiations to end hostilities with Iran, as "pointless."
The geopolitical risk premium in the oil market is at a crossroads shaped by multiple variables: the outcome of U.S.-Iran negotiations, the fragile balance of the Israel-Lebanon ceasefire, and U.S. domestic political constraints on presidential war powers will collectively determine its future trajectory.
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