Oil Prices Decline as Israel Accepts Proposal to Resolve Ceasefire Disagreements

Oil prices fell on Tuesday as Israel accepted a proposal to address disagreements that were hindering a ceasefire deal in Gaza, reducing concerns over potential supply disruptions in the Middle East.

By 0600 GMT, Brent crude dropped 67 cents, or 0.86%, to $76.99 per barrel. U.S. West Texas Intermediate (WTI) crude futures, with the front-month contract expiring on Tuesday, eased 62 cents, or 0.8%, to $73.75 per barrel. The more actively traded second-month contract was down 63 cents, or 0.86%, at $73.03 per barrel.

This followed a significant decline on Monday, where Brent fell about 2.5% and WTI dropped 3%.

The decline in prices was influenced by U.S. Secretary of State Antony Blinken’s announcement that Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” from Washington to address disagreements blocking a ceasefire deal in Gaza, with hopes that Hamas would also agree.

Additionally, supply concerns eased as production at Libya’s Sharara oilfield increased to approximately 85,000 barrels per day, according to engineers at the field. This development aimed to support the Zawia oil refinery, following the National Oil Corporation’s (NOC) declaration of force majeure on oil exports from the field on August 7 due to a protest blockade that had affected production at the 300,000-bpd facility.