Oil Prices Fluctuate Amid Reports of Israel-Hezbollah Ceasefire

Potential peace deal reduces geopolitical risk premium, while OPEC+ and U.S. policy developments loom.

Oil prices initially fell over $2 on Monday following reports of a potential ceasefire agreement between Israel and Hezbollah, before stabilizing slightly on Tuesday.
A ceasefire could lower the likelihood of U.S. sanctions on Iranian oil, which would otherwise reduce global supply by up to 1 million barrels per day.
Tensions between Western powers and major oil producers Russia and Iran continue to fuel concerns over possible supply disruptions.
OPEC+ is expected to discuss maintaining current production cuts at its upcoming meeting on December 1, as global demand remains uncertain.
U.S. President-elect Donald Trump's proposed tariffs on imports from Mexico, Canada, and China add another layer of uncertainty to energy markets.