ISLAMABAD: Global oil prices declined as growing expectations of an extension of the ceasefire between Iran and the United States eased concerns over potential disruptions to crude supplies from the Middle East.
According to market data, Brent crude futures for October delivery fell $1.29, or about 1.5%, to $87.69 per barrel. US West Texas Intermediate crude also declined by $1.30, or 1.6%, to $81.97 per barrel.
The decline was mainly attributed to expectations of weaker global oil demand in 2026 and reports of rising US crude inventories, which have increased pressure on prices.
According to Reuters, investors are closely monitoring forecasts for global oil demand as concerns grow that consumption could remain weaker than previously expected in the coming months.
Lower demand projections from OPEC and other international energy agencies have added to market concerns about future oil consumption. Expectations of weaker demand generally put downward pressure on crude prices as traders anticipate a more balanced or oversupplied market.
Rising US crude inventories have also weighed on prices. Higher stockpiles are generally viewed as a sign of greater supply availability, reducing the need for buyers to bid prices higher.
Despite the decline, oil prices remain sensitive to geopolitical developments involving Iran and the broader Middle East. Risks surrounding the Strait of Hormuz have prevented a sharper fall in crude prices.
The Strait of Hormuz is a critical global energy shipping route through which a significant portion of oil transported from the Persian Gulf passes. Any disruption to shipments through the waterway could lead to a sudden reduction in global supplies and push oil prices sharply higher.
Market volatility has therefore remained elevated, with investors continuing to assess developments surrounding the Iran conflict, global demand forecasts and US inventory data.
Analysts said these factors are likely to remain the key drivers of oil prices in the coming days. Any progress toward extending the Iran-U.S. ceasefire could further ease supply concerns and put additional downward pressure on crude prices.
However, the current decline does not necessarily signal a sustained downward trend. Supply risks in the Middle East remain significant, particularly if the conflict escalates or oil shipments through the Strait of Hormuz are disrupted.
Conversely, if global demand forecasts are revised lower and the conflict weighs on economic activity, oil markets could face further volatility.
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For now, traders remain focused on the balance between weaker demand expectations and persistent geopolitical risks, with developments in Iran and around the Strait of Hormuz likely to play a major role in determining the direction of global crude prices.
