Oil prices moved higher on Friday in Asian trading after Hezbollah rejected a ceasefire proposal involving Israel and Lebanon, raising fresh concerns over regional stability and reducing hopes for a diplomatic breakthrough in the Middle East.
The latest escalation added support to crude markets, which were already positioned for weekly gains amid ongoing hostilities involving Iran, Israel, the United States and Hezbollah.
Oil Benchmarks Continue Weekly Advance
By 23:05 ET (03:05 GMT), Brent crude futures for August delivery were up nearly 0.8% at $95.75 a barrel, while U.S. West Texas Intermediate crude futures gained 0.5% to $90.47 a barrel.
The rise extended a week of positive momentum for oil prices, as traders continued to factor in geopolitical risks and the possibility of prolonged disruptions to global energy supplies.
Hezbollah Dismisses Ceasefire Initiative
The Lebanon-based Hezbollah movement, which is backed by Iran, formally rejected the proposed ceasefire on Thursday, stating that it would neither withdraw its fighters nor support negotiations currently taking place between Lebanon and Israel.
At the same time, Israeli military operations in southern Lebanon continued, prompting further retaliatory attacks from Hezbollah. Israeli officials indicated that military activity would proceed and that no immediate troop withdrawal was planned following a temporary operational pause earlier in the week.
Diplomatic Path Between the U.S. and Iran Faces New Obstacles
The developments have cast further doubt on the prospects for a broader agreement between Washington and Tehran.
Iran has consistently maintained that any lasting peace arrangement must include a ceasefire in Lebanon. Earlier reports suggested that Tehran had suspended indirect talks with the United States after accusing Washington of breaching ceasefire commitments through recent military actions.
During the week, U.S. forces carried out strikes against several targets in Iran, triggering retaliatory operations by Iran’s Revolutionary Guard against U.S.-linked assets in Kuwait and Beirut.
The military exchanges took place despite repeated statements from American officials suggesting that negotiations remained active and that a potential agreement was within reach. Nevertheless, concrete evidence of meaningful diplomatic progress has remained scarce despite optimistic rhetoric from Washington in recent months.
Strait of Hormuz Disruptions Support Prices
Both Brent and WTI contracts were heading toward weekly gains of between 3% and 6%, supported by continued disruptions to oil flows through the Strait of Hormuz.
Although U.S. involvement has helped increase shipping activity through the strategic waterway, overall volumes remain substantially below levels seen before the conflict began.
This has heightened concerns about global energy availability, particularly because the Strait of Hormuz historically handles approximately one-fifth of worldwide oil consumption.
Traders Monitor Conflict for Supply Impact
With no clear signs of a reduction in hostilities, market participants continue to view supply risks as a key factor underpinning oil prices.
As long as uncertainty persists across the region, investors are likely to remain focused on developments that could affect crude production, transportation networks and the broader balance of global energy markets.
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