Oil Prices Fall 4% Amid Gaza Ceasefire Deal, Marking Weekly Losses

Oil prices tumbled more than 4% on Friday, extending losses for a second consecutive session as geopolitical tensions eased following a landmark ceasefire agreement between Israel and Hamas, the first stage of U.S. President Donald Trump’s proposed plan to end the Gaza war.

The sharp decline erased most of the week’s earlier gains, with traders unwinding the so-called “risk premium” that had supported crude markets in recent weeks. Analysts said the ceasefire shifted focus back to supply fundamentals and a looming surplus expected later this year.

At the close of trading, Brent crude futures for December 2025 delivery fell 3.82% to $62.73 per barrel, posting a weekly loss of 2.8%. U.S. West Texas Intermediate (WTI) crude for November 2025 delivery dropped 4.24% to $58.90 per barrel, down 3.2% for the week, according to figures from the Washington-based energy platform Energy Intelligence.

Latest Oil Prices:

WTI Crude • 58.90 -2.61 -4.24%

Brent Crude • 62.73 -2.49 -3.82%

Murban Crude • 64.31 -2.50 -3.74%

Louisiana Light • 65.22 +0.85 +1.32%

Bonny Light • 78.62 -2.30 -2.84%

Opec Basket • 67.09 +0.58 +0.87%

Mars US • 71.01 -0.96 -1.33%

Gasoline • 1.820 -0.062 -3.30%

Natural Gas • 3.106 -0.163 -4.99%

Both benchmarks had already slipped more than 1.5% in Thursday’s session amid early signs that Middle East tensions were easing. The strengthening of the U.S. dollar also weighed on commodity markets, making crude more expensive for non-dollar buyers.

Earlier in the week, oil prices briefly climbed 1.5% to a one-week high, as slow progress in the Ukraine peace negotiations raised speculation that sanctions on Russia, the world’s second-largest oil exporter, would remain in place for longer.

Under the ceasefire agreement approved Thursday by the Israeli cabinet, hostilities will partially halt, Israeli forces will pull back from parts of Gaza, and Hamas will release all remaining hostages captured since the October 7, 2023, attacks, in exchange for the release of hundreds of Palestinian prisoners.

“This deal represents a major step toward ending a conflict that has fueled concerns over supply disruptions,” said Daniel Hynes, senior commodity strategist at ANZ Bank. “The focus is now turning back to the imminent oil surplus as OPEC+ proceeds with its gradual unwinding of voluntary production cuts.”

Eight OPEC+ nations are set to lift output in November, a move analysts say has eased fears of an overly tight market. Still, recent production data suggest the increase may be smaller than previously anticipated.

“The market’s expectations of a sharp supply surge have not materialized,” analysts at BMI Research wrote. “The modest OPEC+ output hike helped stabilize prices earlier this week, but with geopolitical risk fading, the market’s attention is back on fundamentals.”

Investor sentiment remains fragile amid broader economic worries. A prolonged U.S. government shutdown could slow economic growth and weaken fuel demand in the world’s largest oil consumer.

“Oil traders are now recalibrating for a scenario where both geopolitical risks and demand prospects are subdued,” said one London-based trader. “That combination is likely to keep prices under pressure in the near term.”

As the ceasefire takes hold, energy markets appear to be entering a new phase,  one less driven by fear and more by fundamentals. For now, however, the balance between supply recovery and global demand uncertainty continues to weigh heavily on crude prices.