Brent rises despite Israel-Lebanon ceasefire

Brent crude’s price has continued to rise despite a 10-day ceasefire declared between Israel and Lebanon.

IMAGE: Flags of Israel and Lebanon. Getty Images

The US Department of State announced the ceasefire between the two countries following talks on 14 April.

Oil prices continued to move closer to $100/bbl as the Israel-Lebanon ceasefire remains delicate and uncertain, with the Lebanese military accusing Israel of violating the agreement through “several attacks” and “intermittent shelling”.

“The army command continues to monitor developments and take the necessary measures to safeguard citizens' safety,” the Lebanese Army said in a social media post, suggesting potential self-defence moves.

Israel’s Prime Minister Benjamin Netanyahu said in a video statement that Israeli forces will stay stationed in southern Lebanon during the truce, while Hezbollah has said it will oppose any arrangement that allows Israel freedom to operate within Lebanese territory, Reuters reported.

The ceasefire announcement came shortly after US President Donald Trump told reporters that Iran has “agreed to give us [the US] back the nuclear dust that's way underground,” suggesting another potential round of talks between the US and Iran.

Meanwhile, the US army has continued its blockade of the Strait of Hormuz – curtailing vessel movement around Iranian ports. The US Central Command (CENTCOM) imposed the blockade after Washington and Tehran failed to reach a deal.

The move was followed by the US treasury department's announcement that it would not extend the waiver allowing sale of up to 140 million bbls of Iranian crude oil, in a bid to ease some supply disruptions caused by the ongoing conflict.

Avoiding supply shortages remains the key concern for oil markets, and a US-Iran deal has offered no guarantee of relief yet, market analysts said.

"The key factor for energy markets remains developments in the Middle East,” ING Bank’s head of commodities strategy Warren Patterson said. “The only way energy prices move lower is the resumption of flows through the Strait of Hormuz,” he added.

By Aparupa Mazumder

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