Oil prices fell slightly on Friday as hopes for a ceasefire in the Middle East faded following Hezbollah’s rejection of a US-backed proposal in Lebanon.Brent crude slipped 0.22% to $95.24 a barrel, while US West Texas Intermediate (WTI) crude fell 0.11% to $92.94 a barrel in early trade.Despite Friday’s decline, both benchmark contracts were on track to record their first weekly gain in three weeks. WTI was up more than 6% for the week as tensions in the Middle East continued to support prices, Reuters reported.The market remains focused on the ongoing conflict involving Iran, Israel and the United States, as well as disruptions to shipping through the Strait of Hormuz, a key global energy route through which nearly one-fifth of the world’s oil supply passes.Limited traffic through the waterway has fuelled concerns about supply disruptions and pushed prices higher in recent weeks.Fresh uncertainty emerged after Hezbollah leader Naim Qassem rejected a US-brokered agreement between Israel and the Lebanese government aimed at halting the fighting.Iran has also maintained that a ceasefire in Lebanon remains a key condition for any broader peace agreement with Washington.US President Donald Trump, however, struck a more optimistic tone on Thursday, saying he believed progress was being made between Israel and Lebanon and that Lebanon deserved peace.Analysts said conflicting signals from the region continue to keep investors cautious.“Any optimism remains heavily clouded by a tangled web of headlines and counter-headlines,” IG market analyst Tony Sycamore said.Apart from geopolitical tensions, analysts have also flagged concerns about declining global oil inventories, which could tighten supplies further and trigger another price spike during the third quarter of the year.Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for global oil demand growth of 1.2 million barrels per day in 2026 despite the ongoing conflict and continued disruptions in the Strait of Hormuz. OPEC Secretary General Haitham Al Ghais said the organisation remains confident about demand prospects.Iran’s oil exports have also fallen to their lowest level in six years, largely due to the US naval blockade, according to shipping data. However, weaker demand from China has helped limit the impact on global prices.With uncertainty surrounding ceasefire efforts, regional security and global oil supplies, analysts expect crude prices to remain volatile in the coming weeks.
