Oil prices dropped after President Trump announced that Israel and Hamas agreed to the “first phase” of a peace plan. Brent crude futures fell over 0.8%, while West Texas Intermediate futures decreased by a similar margin. The plan includes releasing hostages and an Israeli withdrawal from Gaza, marking progress in resolving the conflict.

Initially, oil prices surged due to Middle East tensions, especially between Israel and Iran. However, prices have fallen about 12% this year. Rystad Energy stated that the success of the peace deal and developments in the Ukraine conflict will impact oil prices significantly. The market will closely monitor the details of the peace plan for any changes in the geopolitical risk premium.

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