The pullback reflects a cautious market reaction to the agreement, which requires Hezbollah to withdraw from southern Lebanon while the Lebanese Armed Forces assume control of the territory. Despite the diplomatic optimism, skepticism remains high; a similar attempt in April failed to halt hostilities, and exchanges of fire continued Wednesday despite the latest announcement.

Washington is simultaneously grappling with internal friction, as the House of Representatives passed a resolution aiming to restrict President Trump’s authority to conduct military operations against Iran. While the measure faces a steep path through the Senate, it highlights growing domestic pressure regarding foreign policy. Iranian Foreign Minister Abbas Araqchi tempered expectations, noting that while texts are being reviewed, no significant progress has been reached.

Market participants are looking beyond the headlines toward tightening fundamentals. The EIA reported a sharp 8-million-barrel drop in commercial crude inventories for the week ending May 29, leaving stockpiles at 433.7 million barrels. Even if the Strait of Hormuz reopens, the erosion of global oil buffers suggests that any relief in prices may be slow to materialize against the backdrop of long-term infrastructure and supply strain.