Key facts
- Hezbollah rejected a U.S.-brokered ceasefire agreement with Israel.
- Oman's Mina al Fahal terminal suspended oil loadings after an explosion.
- Oil prices rose, paring losses from the previous session.
- The conflict's continuation impacts U.S.-Iran peace negotiations.
- Analysts note concerns about falling global oil inventories.
Oil prices saw an increase on Friday, partially recovering from significant losses incurred the previous day. This rise was influenced by Hezbollah's rejection of a U.S.-brokered ceasefire proposal with Israel and the suspension of oil loadings at Oman's Mina al Fahal terminal following an explosion, reportedly due to a drone attack. Brent crude futures rose by 0.35% to $95.36 a barrel, while U.S. West Texas Intermediate crude saw a slight increase of 0.02% to $93.06 a barrel. Both contracts were on track for their first weekly gain in three weeks, with WTI up over 6%. The ongoing conflict in the Middle East and protracted U.S.-Iran peace talks, coupled with limited traffic in the Strait of Hormuz, a critical oil transit route, contributed to market sentiment. Analysts also highlighted concerns about declining global oil inventories, potentially leading to a price spike in the third quarter. Hezbollah leader Naim Qassem reiterated the group's demand for a comprehensive cessation of aggression and Israeli withdrawal, dismissing the terms of the U.S.-backed agreement. Iran has linked a ceasefire in Lebanon to any potential peace deal with Washington. OPEC Secretary General Haitham Al Ghais maintained the organization's oil demand growth forecast of 1.2 million barrels per day for the year, despite regional conflicts and the Strait of Hormuz closure. Iranian oil exports have reportedly fallen to a six-year low, partly due to U.S. sanctions and weak demand in China.