Markets responded swiftly. The ceasefire has reduced expectations of a wider regional spillover, particularly fears of disruptions to vital shipping routes or damage to energy infrastructure in adjacent territories. As a result, the “risk premium” baked into oil prices has begun to unwind.
President Trump, in a post on Truth Social, said that the deal means “ALL of the Hostages will be released very soon, and Israel will withdraw their Troops to an agreed upon line”. Israeli Prime Minister Benjamin Netanyahu described the agreement as “a great day for Israel”, while Hamas confirmed the deal and called on Trump and other guarantors to compel Israel to fully implement the agreement.
Weakness in demand, whether from slower economic growth, seasonal declines, or energy efficiency gains, could exert additional downward pressure. Several analysts have flagged the risk that oil prices could slip well below current levels if the ceasefire holds and supply continues to outpace demand.
Credit: Oilprice.com
