Oil Prices Fall as Geopolitical Tensions Ease

Israel withdrew troops from southern Gaza over the weekend, reducing its military presence in the area to their lowest levels since October 2023. Oil prices had gained more than 4% last week as tensions mounted between Israel and Iran, and have since dropped in response to the news that Israel would leave just one brigade in the Gazan city of Khan Younis, and that it had sent a team to Egypt for ceasefire talks with Hamas representatives.

Crude prices had previously risen in response to Ukrainian drone attacks on Russian oil refineries, and global supplies remain tight with OPEC+ production cuts and supplies sitting at sea as carriers avoid the Red Sea following Houthi attacks on vessels.

WTI Crude settled down (0.6%) to $86.43 and Brent was down (0.9%) to $90.38 at the end of Monday’s session.