Oil prices fell on Wednesday, pressured by growing diplomatic momentum toward a ceasefire in the Middle East, ongoing uncertainties over the US Federal Reserve’s monetary policy, and concerns about the impact of Washington’s protectionist trade measures on global demand.
At 10:35 a.m. local time (07:35 GMT), Brent crude, the international benchmark, was trading around $74.80 per barrel—down approximately 1.2% from the previous close of $75.70. Similarly, US West Texas Intermediate (WTI) crude declined about 1.3% to $72.64 per barrel, compared to $73.60 at the prior session’s close.
The decline followed reports that the US has proposed a 60-day ceasefire in the Gaza Strip, coupled with a prisoner exchange deal with Hamas, easing geopolitical risk premiums that had buoyed prices. Israeli media indicate that the government is currently reviewing the offer, which involves releasing Israeli hostages held by Hamas in exchange for Palestinian prisoners. While Hamas is said to have accepted the proposal, no official confirmation has been released by either side.
Israeli Prime Minister Benjamin Netanyahu stated on June 10 that “significant progress” had been made in ceasefire and prisoner swap negotiations.
Price pressures intensified earlier after Israel conducted airstrikes on June 13 targeting senior military leaders and sensitive infrastructure, including nuclear facilities, across multiple Iranian cities. These strikes triggered renewed diplomatic efforts to de-escalate tensions between Tel Aviv and Tehran.
Regional actors have called for restraint. Egyptian Foreign Minister Badr Abdulati held phone discussions with US envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, urging calm. Meanwhile, Qatari Foreign Ministry spokesperson Majid Al-Ansari warned from Doha that regional stability “cannot withstand another escalation,” underscoring the vital importance of protecting energy infrastructure. Chinese Foreign Ministry spokesperson Guo Jiakun, speaking in Beijing, urged influential nations to “act responsibly” to prevent wider regional conflict.
Alongside geopolitical developments, broader macroeconomic concerns weighed on the market. Uncertainty over the Fed’s future policy direction and the consequences of US trade protectionism continue to cloud demand prospects.
Analysts caution that any resurgence in oil prices driven by Middle East tensions could reignite global inflationary pressures. Although the Federal Reserve is widely expected to hold interest rates steady at its policy meeting tonight, the probability of a rate cut in September has diminished to 71%, down from earlier expectations. A delay in easing monetary policy, coupled with a stronger US dollar, could further curb oil demand and add downward pressure on prices.
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