Oil prices turn negative after U.S. official says Israel, Hezbollah agree to ceasefire

Oil prices turned lower after Israel and Iran-backed Hezbollah agreed to a ceasefire from 4 p.m. local time on Friday (9 a.m. ET), a U.S. official told CNBC.

The report comes shortly after follow-up talks between the U.S. and Iran in Switzerland were abruptly called off, underscoring lingering uncertainty over efforts to turn an interim agreement into a lasting peace settlement.

International benchmark Brent crude  futures for August were last seen 1% lower at $79.02 per barrel, erasing earlier gains, while U.S. West Texas Intermediate futures for July traded 0.8% lower at $75.96. Both contracts were on track for a weekly loss of about 8%.

The report comes shortly after follow-up talks between the U.S. and Iran in Switzerland were abruptly called off, underscoring lingering uncertainty over efforts to turn an interim agreement into a lasting peace settlement.

Switzerland’s foreign ministry said U.S.-Iran talks scheduled to take place at Bürgenstock on Friday would not proceed as planned.

The White House also said that Vice President JD Vance was no longer traveling to Switzerland, citing unresolved logistical issues surrounding the negotiations.

Vance on Thursday said tankers with more than 12 million barrels crossed the strait overnight.

“The Iranians, for the second night in a row, did not shoot at any ships in the Strait of Hormuz,” Vance told reporters. “So far, they are honoring their end of the commitment.”

Separately, OPEC Secretary General Haitham Al Ghais told CNBC in an exclusive interview that the organization does not expect oil demand to peak in the foreseeable future. He also rejected forecasts from the International Energy Agency that point to a future supply glut.