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Oil Prices Dip After Ceasefire News, But Supply Risks Remain
Oil prices have dropped after recent developments in the Middle East, with Brent falling 0.8% to $98.57 and WTI down 1.1% to $93.61.
The easing comes as a 10-day ceasefire between Israel and Lebanon, along with discussions about possible US-Iran talks, have cooled panic buying. The market is recalibrating after the war premium built through March, but this shift does not signal a full return to normal conditions.
While the ceasefire has lowered the immediate risk of escalation, the physical supply disruption in the Strait of Hormuz remains a significant issue. This vital waterway handles about 20% of global oil supply, and its ongoing disruption is keeping oil prices above pre-war levels.
The market is cautious as traders wait for further signs of stability in Gulf energy flows. Shipping disruptions, higher insurance costs, and operational challenges in the region continue to limit supply, preventing prices from falling sharply. While oil is now supported above $89, the technical outlook shows the market in a short-term bearish correction, with resistance around $91.50. The next key levels to watch are support at $89.30 and resistance at $91.50.
Traders will be closely monitoring the pace of shipping through the Strait of Hormuz, any updates from US-Iran talks, and whether Brent can hold below $100 without triggering fresh concerns over supply tightness. If Gulf flows improve, oil may continue to ease. If talks stall or transportation remains constrained, the current dip could be deeper than expected.
Discover how geopolitical events and supply constraints are affecting oil prices in this article.
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