Oil prices decline as geopolitical tensions in the Middle East ease

In early Asian trading on Monday, oil prices declined by 1 percent as tensions in the Middle East alleviated following Israel’s withdrawal of more soldiers from the southern Gaza Strip and its commitment to engage in new talks regarding a potential ceasefire in the ongoing conflict, which has persisted for six months.

Brent crude futures dropped by 94 cents, or one percent, to reach $90.23 per barrel by 2253 GMT, after reaching a session low of $90.01.

Similarly, US West Texas Intermediate crude reached $86.01 per barrel, marking a decrease of 90 cents, or one percent, after hitting a low of $85.80.

The easing tensions in the Middle East prompted Israel and Hamas to dispatch two delegations to Egypt for fresh discussions on a potential ceasefire before the Eid holiday. This development contributed to a relaxation of tensions that had previously fueled concerns about supply disruptions, leading to a more than 4 percent increase in oil prices last week.

Israeli Defense Minister Yoav Galant stated on Sunday that Israel stands prepared to address any potential developments with Iran, following Tehran’s threats to retaliate against the killing of Iranian military leaders on April 1.

Meanwhile, Saudi Arabia, the world’s largest exporter of crude oil, adjusted its official selling prices for all crude grades to Asia, aligning with market expectations.

In addition, Baker Hughes (NASDAQ:BKR), a leading oilfield services company, reported on Friday that US oil rigs increased by 2 rigs to 508 rigs last week, while gas rigs decreased by 2 rigs to 110, reaching their lowest level since January 2022.