Oil falls 3%, Brent settles near $95 a barrel

Oil drilling rigs

Oil prices settled lower on Thursday as hopes for an end to the US-Iran conflict raised the prospect of reopening the Strait of Hormuz, following the announcement of a ceasefire agreement between Israel and Lebanon.

The decline came after crude posted gains in the previous session amid renewed hostilities between the US and Iran. However, comments from Donald Trump affirming that negotiations remain ongoing revived hopes for a diplomatic settlement.

Russian Deputy Prime Minister Alexander Novak said on Thursday that oil production has declined since the start of the year due to unplanned refinery maintenance, marking the first official acknowledgment of the issue by a Russian official.

Despite supply disruptions in the Middle East, Haitham Al Ghais, secretary-general of OPEC, said during the St. Petersburg International Economic Forum that the group continues to expect strong growth in global oil demand and sees no need to revise its current forecasts.