ALBAWABA- Global oil prices recorded their sharpest weekly decline in months, with Brent Crude falling about 8% over the week, as a renewed ceasefire between Israel and Hezbollah and progress on the US-Iran agreement eased concerns over potential disruptions to global energy supplies.
Although prices edged higher on Friday, markets remained under pressure as geopolitical risk premiums continued to fade amid signs of improving stability in the Middle East.
Brent crude futures rose 0.9% during Friday's session to settle near $80.57 per barrel, while US West Texas Intermediate (WTI) crude gained between 0.25% and 1.23%, trading in the $72-$77 per barrel range and settling near $76.60, according to market reports.
Despite the modest rebound, both benchmarks ended the week significantly lower as investors reassessed the likelihood of supply disruptions.
The decline follows major diplomatic developments, including the renewal of a ceasefire between Israel and Hezbollah and the implementation of the recently signed US-Iran Memorandum of Understanding (MOU).
The easing of tensions has already enabled the release of more than 85 million barrels of oil previously stranded in the Gulf region, while commercial shipping has resumed through the Strait of Hormuz, one of the world's most important energy transit routes.
Iran has outlined conditions for the long-term normalization of shipping through the strategic waterway, reinforcing market expectations that global oil flows could stabilize in the coming weeks.
Trading volumes remained relatively subdued on Friday due to a US federal holiday, though analysts said sentiment was largely driven by diminishing geopolitical risks.
The US-Iran agreement, signed earlier this week, includes provisions for reopening the Strait of Hormuz, granting sanctions waivers, and launching a 60-day negotiating period to address Iran's nuclear program and broader regional security issues.
At the same time, the renewed Israel-Hezbollah ceasefire, while fragile, has helped reduce immediate fears of a wider conflict that could threaten global energy supplies.
However, technical talks between Washington and Tehran scheduled to take place in Switzerland have been delayed, while sporadic clashes and mutual accusations of ceasefire violations continue in Lebanon.
Although short-term supply concerns have eased considerably, underlying market fundamentals could limit further price declines. Tight global inventories, uncertain demand prospects, and unresolved geopolitical disputes remain key risks for energy markets.
