Global oil prices declined on Thursday after signs of diplomatic progress in the Middle East improved market sentiment and eased concerns over potential supply disruptions.
The decline followed reports that a ceasefire agreement between Israel and Lebanon had raised hopes for broader negotiations involving Iran. U.S. President Donald Trump also indicated that progress in discussions with Iran could emerge as early as this weekend.
The price movement provided some relief after both oil benchmarks gained around 2% on Wednesday amid renewed tensions in the Middle East, including Iranian attacks on Kuwait and U.S. military operations near the Strait of Hormuz.
How it happened:
In the United States, the House of Representatives approved a resolution seeking to limit President Trump’s authority to continue military action against Iran. However, the measure still requires Senate approval and would likely face a presidential veto.
Despite the decline in prices, market analysts cautioned that risks remain elevated. Iranian Foreign Minister Abbas Araqchi said contacts with Washington continue, but no breakthrough has yet been reached in negotiations.
Meanwhile, U.S. crude oil inventories fell by 8 million barrels during the week ended May 29, according to the U.S. Energy Information Administration. The decline was significantly larger than analysts’ expectations of a 4 million-barrel reduction.
Analysts noted that shrinking global oil inventories and ongoing geopolitical uncertainty could continue to support higher oil prices in the coming weeks.
For oil-importing economies such as Sri Lanka, the easing of prices offers some short-term relief. However, continued uncertainty surrounding the Middle East situation means the outlook for global energy prices remains highly unpredictable.
Inputs from CNBC
Last modified: June 9, 2026
