Oil prices declined on Thursday 4 June following the announcement of a ceasefire agreement between Israel and Lebanon, raising hopes for potential advances towards a wider deal in the Middle East.
By 07:29 GMT, Brent crude had slipped $0.77, or 0.8%, to $97.03 a barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) crude was down $0.70, or 0.7%, at $95.32/bbl.
The reduction in prices came after both benchmarks had climbed by around 2% on Wednesday. The increase was driven by hostilities in the region, including reported Iranian attacks on Kuwait and US military strikes close to the Strait of Hormuz.
However, late on Wednesday, Israel and Lebanon confirmed that they had reached an agreement on a ceasefire.
The development contributed to optimism around possible progress in negotiations between Washington and Tehran.
According to details in the agreement, Iran has linked any comprehensive settlement to ending fighting between Israel and Lebanon.
US President Donald Trump said on Wednesday that progress in talks with Iran could be seen as early as the coming weekend.
Iranian Foreign Minister Abbas Araqchi stated that communication between Tehran and Washington was ongoing, but negotiations had not advanced, with both parties continuing to review the documents exchanged.
Meanwhile, the US House of Representatives, led by Republicans, passed a resolution aimed at preventing President Trump from proceeding with military action against Iran.
For the resolution to be implemented, it would require approval from the Senate and two-thirds support in both chambers to overcome a probable veto by the president.
US oil supply data showed that crude stockpiles fell by eight million barrels (mbbl) to 433.7mbbl in the week ended 29 May, according to the Energy Information Administration.
Meanwhile, crude exports from the US reached 5.9mbbl per day (mbbl/d), the second-highest level recorded, driving a 6.7mbbl decline in Gulf Coast inventories, reported Reuters.
Stocks at Cushing, Oklahoma, the benchmark point for WTI futures, dropped by 583,000bbl to 22.4mbbl.
Furthermore, Iranian Light crude was reportedly being offered at a discount of $0.50–$1/bbl to the ICE Brent contract for June delivery into China, down from previous premiums, reported Reuters.
Data showed Iran’s crude exports in May fell to a six-year low of 260,000 barrels per day, significantly below the 2025 average of 1.67mbbl/d.
