(RTTNews) – Crude oil fell on Friday amid rapid developments in the Middle East as the first phase of the Gaza peace plan took effect, confirming the return of peace to the region where the long war has cost thousands of lives.
WTI crude oil for November delivery was last seen trading at $58.82 per barrel, down $2.69 (or 4.37%).
Recently, US President Donald Trump proposed a 20-point peace plan to end the bitter conflict between Israel and Palestine.
The first phase of the peace plan is now in effect. Israeli forces are pulling out of Gaza, allowing thousands of displaced Palestinians (what remains) to return to their homeland.
For its part, Hamas must honor its commitment to release Israeli hostages in its captivity within the next 72 hours.
These activities reduced the risk premium associated with the Red Sea and the Suez Canal and virtually eliminated the threat of Houthi attacks, thereby allaying oil and energy transit concerns and impacting oil prices.
The sharp decline in crude oil prices also came as US President Donald Trump threatened to raise massive tariffs on China in retaliation for expanding export controls on rare earths.
Trump accused China of “being very hostile” in a post on the social media platform Truth Social and said he would no longer meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation forum in South Korea because he “sees no reason to do so now.”
The OPEC+ alliance announced on Sunday that the group had agreed to a plan to increase output by 137,000 barrels per day in November, much less than first estimated in some sections of the media. Concerns about oversupply are limited in these figures.
Starting in late 2022, the cartel implemented voluntary production cuts that peaked at around 2.5 million barrels per day through September 2025.
Yesterday, in an effort to prevent Iran financing its nuclear ambitions by selling oil, the US imposed sanctions on nearly 100 individuals, entities and vessels, as well as a Chinese independent refinery and terminal that have helped Iran’s oil and petrochemical trade.
Iraq, the number two producing country of OPEC, is showing momentum in its oil trade. A few weeks ago, the nation resumed its oil exports from the Kurdistan Region to Turkey.
US oil company ExxonMobil is returning to Iraq after almost two years to develop the Majnoun oil field, where oil reserves are estimated at about 38 million barrels. Reportedly, the company also plans to build crude oil storage facilities close to demand centers in Asia, the US and Europe.
In the US, New York Fed President John Williams and San Francisco Fed President Mary Daly have indicated that additional rate cuts are likely this year due to potential risks to the labor market.
Since crude oil is a dollar-denominated commodity, traders are eagerly awaiting the US Federal Reserve meeting later this month in which a rate cut decision will be announced, which will impact the value of the dollar and ultimately oil prices.
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