A ceasefire between Israel and Lebanon eased supply concerns, causing international oil prices to fall 8% this week.

Israel and Hezbollah in Lebanon reached a ceasefire agreement , significantly easing market concerns about disruptions to Middle Eastern oil supplies. International oil prices fell by about 8% this week, marking one of the largest weekly declines in recent months.

As of Saturday (June 20), Brent crude futures closed at $80.57 per barrel, down 8% for the week; West Texas Intermediate (WTI) crude futures closed at $77.54 per barrel, down 9% for the week. However, both oil prices saw slight increases on Friday (June 19).

Trading was relatively quiet due to the US holiday. Gulf oil producers are preparing to increase exports as the ceasefire agreement between Israel and Hezbollah took effect at 4 p.m. local time on Friday.

Reuters reports that ship tracking data shows at least four oil tankers carrying crude oil , petroleum products, and liquefied petroleum gas entered the Strait of Hormuz on Friday, heading to Iraqi Gulf ports. However, Iran has simultaneously tightened its control over shipping. Iranian state television reported that all vessels must coordinate with the Iranian Revolutionary Guard Navy for passage; the Persian Gulf Straits Authority also requires vessels to obtain permits before transiting the Strait of Hormuz.

Rory Johnston, founder of Commodity Context, pointed out that the market had originally expected the ceasefire agreement to be implemented smoothly, but the new conditions proposed by Iran showed that this was not necessarily the case, thus supporting the rebound in oil prices on Friday.

Despite Friday's rebound, Brent crude oil prices still fell by about 8% this week. Analysts believe that the main reason for the price decline was the significant reduction in market concerns about supply disruptions following the agreement between the United States and Iran to end the conflict.

Phil Flynn, a senior analyst at Price Futures Group, said oil prices are gradually returning to pre-conflict levels, and market supply is expected to increase further in the coming days.

Iran's Foreign Ministry revealed on Friday that the planned meeting between Iranian and US officials in Switzerland has been postponed to the coming days. Iran stated that the meeting is no longer urgent, as the two sides have already signed a memorandum of understanding on ending the conflict electronically .

Market participants expect the agreement to allow more than 85 million barrels of crude oil previously stranded in the Persian Gulf region to flow back into the international market. Furthermore, the lifting of US sanctions on Iranian oil will also bring more supply to the market.

However, analysts point out that about 20% of the world's crude oil and liquefied natural gas supply is transported through the Strait of Hormuz, and even if an agreement is reached, it may still take several months for shipping and production to fully return to normal.

Analysts predict oil prices will fall in the future. Citi expects the global oil market to experience oversupply under the baseline scenario of continued supply recovery, with oil prices likely to continue to decline over the next six to twelve months, potentially falling to the $60-$65 per barrel range by the first quarter of 2027.

Commerzbank lowered its year-end Brent crude oil price forecast from $85 to $80 per barrel, but believes that oil prices will remain above pre-conflict levels for most of the next year.

On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) predicts in its latest "World Oil Outlook 2026" report that global oil demand will increase from 105.1 million barrels per day in 2025 to 113.3 million barrels per day in 2030.

Source: [Lianhe Zaobao] (https://www.zaobao.com/finance/world/story20260620-9236202)