Global oil prices drop 2% amid easing West Asia tensions

Global crude oil prices retreated by up to 2 per cent on Friday, reversing part of the sharp gains seen in the previous session, as easing geopolitical tensions in West Asia lifted hopes of a potential resolution to the ongoing conflict.International benchmark Brent Crude fell over 1 per cent to trade at $97.99 per barrel during early trade, after hitting an intra-day low. Similarly, US benchmark West Texas Intermediate (WTI) declined nearly 2 per cent to an intra-day low of $92.91 per barrel.
The pullback comes after a strong rally in the previous session, when Brent settled around $99.39 per barrel, marking a surge of nearly 5 per cent, while WTI closed over 2 per cent higher at $93.32.On the domestic front, crude oil futures on the Multi Commodity Exchange of India mirrored global cues, falling as much as 2.6 per cent to ₹8,625 per barrel.
Ceasefire Hopes Weigh on Prices
Market sentiment turned cautious after signs of de-escalation in the West Asia conflict, which had erupted on February 28 and driven volatility in energy markets.Investors reacted positively to remarks by Donald Trump, who announced a proposed 10-day ceasefire between Israel and Lebanon. He also indicated that Tehran had signalled a willingness to refrain from pursuing nuclear weapons for more than two decades.In a social media post, Trump urged restraint from regional actors, expressing optimism about a peaceful resolution. He later told reporters that the United States was “very close to a deal with Iran,” raising expectations of reduced geopolitical risk in a region critical to global oil supply.
Markets React to Easing Risk Premium
Oil prices had surged earlier this week amid fears of supply disruptions from the conflict zone, which accounts for a significant share of global crude output. The latest developments, however, have prompted traders to unwind some of the risk premium built into prices.
Global Markets Mixed
Equity markets reflected mixed sentiment across regions. In India, benchmark indices BSE Sensex and Nifty 50 opened on a flat note, indicating cautious investor positioning.
Asian markets traded lower, with key indices slipping up to 1 per cent amid lingering uncertainty. Meanwhile, US markets ended modestly higher overnight, with the Nasdaq Composite rising 0.36 per cent and the S&P 500 gaining 0.26 per cent.While easing tensions have provided short-term relief to oil markets, analysts caution that prices remain sensitive to geopolitical developments in West Asia. Any setback in ceasefire negotiations or escalation in conflict could quickly reignite volatility and push crude prices higher once again.

(Business Correspondent)