08:46 AM EDT, 06/05/2026 (MT Newswires) -- Oil prices edged lower early on Friday with little change in the outlook for a settlement to the U.S. war on Iran as Israel continued strikes at Lebanon despite reaching a ceasefire with the country a day earlier.

West Texas Intermediate crude oil for July delivery was last seen down US$0.33 to US$92.71 per barrel, while August Brent oil was down US$0.44 to US$94.59.

Oil fell more than 3% on Thursday after reports Israel and Lebanon agreed to a U.S.-brokered ceasefire, one of Iran's key demands for agreeing for a deal of its own to end the war with the United States and reopen the Strait of Hormuz. The key Strait has been closed since the United States and Israel launched strikes on Iran on Feb. 28, blocking the 20% of daily oil demand supplied by Persian Gulf nations.

Peace talks between the United States and Iran that could open the waterway have been stalled and a ceasefire was tested earlier this week as the two sides traded strikes. The Israel-Lebanon agreement was seen as a potential avenue to reopening negotiations, however Al Jazeera on Friday reported Israel is continuing attacks in Lebanon, raising doubts the deal will hold, while Iran on Friday fired warning strikes at U.S. warships.

The lack of Persian Gulf supply has left the Asian nations struggling to replace the lost barrels, while U.S. exports have surged, cutting into its inventories.

"Crude oil trades softer but remains near the upper end of Brent's recent USD 90-100 range after the Israel-Lebanon ceasefire announcement. The move follows another day of US and Iranian military action across the region. While flows through the Strait of Hormuz remain severely disrupted, global supply buffers continue to shrink. In the US, a sixth consecutive weekly inventory draw saw stockpiles at Cushing, the delivery hub for WTI futures, fall to 22.4 million barrels, edging closer to levels widely considered near the operational minimum," Saxo Bank said in a Thursday note.