Oil prices slipped more than 1% on Friday after Israel and Lebanon agreed to a 10-day ceasefire, and US President Donald Trump signalled more talks with Iran over the weekend.
President Trump indicated on Thursday that a deal to end the Iran war might be imminent, telling reporters outside the White House, “We’re very close to making a deal with Iran.”
In an effort to resolve a major obstacle to ending the Iran war, which has halted approximately one-fifth of global oil shipments by closing the Strait of Hormuz for seven weeks, Trump announced that Tehran has proposed a non-nuclear commitment lasting over 20 years.
“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” Trump spoke to reporters outside the White House on Thursday.
Diplomacy, conflict, and global supply impact
Oil prices reflected this crisis, climbing a record 50% in March before recently falling below $100 per barrel.
They have stabilised in the $90 range for the past week.
A major obstacle to the peace deal sought by Trump has been Israel’s ongoing campaign in Lebanon.
Instead of aiming for a comprehensive peace accord, US and Iranian negotiators are now seeking a temporary memorandum to avert renewed conflict, according to a Reuters report on Thursday.
This development comes as the closure of the Strait has disrupted an estimated 13 million barrels per day of oil flow, as analyzed by ING Economics’ head of commodities strategist Warren Patterson.
The price of West Texas Intermediate crude oil was last at $93.36 per barrel, down 1.4%, while Brent was at $98.10 a barrel, down 1.3% from the previous close.
Prices likely to remain volatile
Despite the decline in crude oil, prices are likely to remain volatile due to uncertainty in the Middle East.
Despite the midnight local time implementation of the truce on Friday, uncertainty persists in the Middle East.
This is due to the Lebanese army reporting multiple ceasefire violations by Israel on Friday.
Any signs of escalating tensions in the Middle East could boost the WTI price in the near term.
While the potential for a two-week extension of the US-Iran ceasefire could dampen WTI crude oil prices, some European and Gulf Arab officials anticipated that reaching a comprehensive deal may take as long as six months, according to a Bloomberg report.
Meanwhile, analysts believe that oil prices were experiencing a bearish sequence after WTI crude had slipped below $93 a barrel.
The channel support at around $93 has been definitively broken by the price, suggesting a continuation of the downward trend, according to an FXStreet analysis.
The decline in oil prices is currently beneficial for other markets, notably equities, and could lead to a deceleration in the dollar’s appreciation, the analysis stated.
The forward curves for Brent and, to a lesser extent, WTI continue to show backwardation, indicating that short-term supply constraints are expected to diminish over the course of the year.
“But this backwardation is not as steep, or indeed as regular as it was a week ago. That suggests some nuances are coming back into pricing, which also suggests that the overall situation may be considered clearer than it was recently,” said David Morrison, senior market analyst at Trade Nation.
https://invezz.com/news/2026/04/17/oil-drops-on-mideast-ceasefire-optimism-prices-likely-to-remain-volatile/
