Core Insights - The article discusses the agreement between Israel and Hamas to end the Gaza conflict, which has led to a decrease in oil prices due to reduced geopolitical risk [1][2][3] - The immediate market reaction saw a decline in oil prices, with WTI crude oil falling by $1.04 to $61.51 per barrel and Brent crude oil dropping by $1.03 to $65.22 per barrel [1] - Analysts suggest that if the peace plan proves credible, it could have a significant structural impact on oil prices, including reduced disruptions in the Red Sea and potential increases in Iranian oil exports [1][3] Short-term Impact - The ceasefire agreement has led to a release of geopolitical risk premium, reflected in the immediate drop in Brent crude oil prices [2] - Investors are reassessing supply risks in the Middle East, resulting in a rapid decrease in risk premium and a reduction in non-commercial net long positions in WTI crude oil [2] Long-term Impact - The agreement may lead to a reconfiguration of rules and supply dynamics, including reduced disruptions in the Red Sea and a potential increase in Iranian oil exports due to renewed nuclear agreement prospects [3] - OPEC's policies may also be affected, with Saudi Arabia potentially adjusting its production strategy in response to the changing geopolitical landscape [3] Future Outlook - There are risks associated with the execution of the ceasefire agreement; if it fails, geopolitical risk premiums could rebound, leading to increased oil price volatility [4] - The future of oil prices will be influenced by the ongoing geopolitical dynamics, particularly regarding Iran and OPEC's strategies [4]