Oil Prices Decline as War Fears Fade

Oil prices are falling as investors reduce expectations of a broader Middle East war. The recent U.S.-brokered ceasefire between Israel and Iran, though unstable, has eased immediate fears of major supply disruptions. Brent and WTI oil futures slipped early Monday as traders reassessed geopolitical risks.

U.S.-Brokered Ceasefire Faces Criticism

President Trump admitted both Israel and Iran have violated the ceasefire deal. His statement that he’s “really unhappy” with Israel adds to uncertainty. Still, markets see the agreement as holding—at least for now—limiting oil’s upside.

Expert Analysis Reflects Market Sentiment

Andy Lipow, president of Lipow Oil Associates, told Morning Brief that the current oil price action reflects cautious optimism. With no direct escalation, oil traders are stepping back from earlier bullish bets. The lack of new supply threats has allowed prices to soften.

Oil Market Adjusts to Unstable Peace

Even amid diplomatic fragility, oil prices continue adjusting to a perceived reduction in conflict risk. Investors had priced in a possible disruption to oil flows, especially through the Strait of Hormuz. Now, with military escalation off the table for the moment, oil is losing its war premium.

Short-Term Outlook Hinges on Ceasefire Stability

Despite falling prices, oil markets remain on alert. If the ceasefire breaks, oil could surge again. Any new action in the Strait of Hormuz or near oil production sites would rapidly change the outlook. For now, oil is caught between short-term calm and long-term risk.