SINGAPORE – Oil prices fell in early Asian trade on Thursday as Israel and Hamas agreed to the first phase of a plan to end the war in Gaza, reducing the geopolitical risk premium that had been supporting global oil markets. Brent crude futures dropped 51 cents (0.77%) to $65.74 per barrel, while U.S. West Texas Intermediate (WTI) fell 55 cents (0.88%) to $62.00 by 0002 GMT.
The decline came after U.S. President Donald Trump announced that Israel and Hamas had reached a long-sought ceasefire and hostage-release agreement under a broader plan aimed at ending the two-year-old war in the Palestinian enclave. Israeli Prime Minister Benjamin Netanyahu said he would convene the government on Thursday to approve the deal.
Read More: Trump Announces First Phase of Gaza Ceasefire Plan Between Israel and Hamas
The Gaza conflict had previously supported oil prices amid fears of a wider regional escalation that could threaten global energy supply. Prices had risen around 1% on Wednesday, hitting a one-week high, after investors viewed the stalled Ukraine peace talks as a sign that sanctions on Russia would remain in place, maintaining tightness in global supply. However, the latest ceasefire development prompted traders to sell off positions tied to geopolitical risks.
Read More: Gaza Residents Reject Disarmament and Political Exclusion
Despite the price decline, U.S. consumption data signaled robust demand. According to the Energy Information Administration (EIA), total weekly U.S. petroleum products supplied — a proxy for consumption — rose last week to 21.99 million barrels per day, the highest level since December 2022. The data suggests resilient fuel demand even as global crude markets react to easing geopolitical tensions.