Israel and Lebanon have agreed to extend their ceasefire by three weeks following a meeting at the White House with senior U.S. officials, according to U.S. President Donald Trump, who announced the extension on Truth Social and stated, "The Meeting went very well!" Trump also pledged that the United States would work with Lebanon to help protect it from Hezbollah, the Iran-backed militia group [1][2]. The ceasefire, initially set for 10 days, now allows more time for diplomatic negotiations, with Washington promising support to bolster Lebanon's defenses [2].
Despite the ceasefire extension, oil prices continued to rise as the Middle East conflict stoked energy security concerns. Brent crude futures closed at $105.07 per barrel on Thursday, up about 3%, and rose more than 1.25% to $105.38 per barrel in Friday trading. U.S. West Texas Intermediate futures closed at $95.85 on Thursday, also up around 3%, and advanced 1.14% to $96.96 per barrel on Friday [1][2]. The ongoing closure of the Strait of Hormuz, due to naval blockades and both the U.S. and Iran seizing ships, has kept markets on edge. About 20 million barrels of oil and petroleum products were shipped daily through the strait before the conflict [2].
Fatih Birol, head of the International Energy Agency (IEA), described the situation as "the biggest energy security threat in history," noting that "as of today, we've lost 13 million barrels per day of oil ... and there are major disruptions in vital commodities" [1][2]. Birol has previously warned that the Iran war and the closure of the Strait of Hormuz could result in "the largest energy crisis we have ever faced" and urged governments to strengthen their resilience with alternative energy sources [2].
Market reactions reflected investor caution, with U.S. stocks pulling back amid concerns over the tenuous ceasefire between the U.S. and Iran and uncertainty about a lasting peace deal. Stock futures were little changed, and Asia-Pacific markets opened mixed [1]. Analysts at Commonwealth Bank of Australia noted that "the longer the strait remains closed, the greater the economic costs — raising the likelihood that one side will be forced to back down." They judged that the U.S. might be the first to back down due to mounting political and economic costs, but warned of a risk of major military escalation that could significantly push up the U.S. dollar [2].
CONCLUSION
The extension of the Israel-Lebanon ceasefire has not eased market anxieties, as the ongoing closure of the Strait of Hormuz continues to disrupt global oil supplies and drive prices higher. Analysts and energy officials warn of severe economic and energy security risks if the situation persists, with markets remaining highly sensitive to further developments in the region.