Live updates as Israel and Hamas agree to the first phase of a peace plan
Oil markets opened lower after reports that Israel and Hamas have agreed to the first phase of a plan to end the Gaza war, signaling a potential de-escalation after years of conflict. Brent crude traded around $65.70 per barrel, while U.S. WTI hovered near $62, as investors weighed the implications of a pause in fighting against the risk of renewed tensions in the region.
What the first phase entails
According to sources briefed on the talks, the deal centers on a pause in hostilities, the exchange of hostages for prisoners, and a staged withdrawal by Israeli forces from parts of Gaza. The exchange is reported to involve 20 living hostages in return for approximately 2,000 Palestinian prisoners. The timeline allows for a rapid release once the agreement is implemented, with the parties signaling a 72-hour window for the initial steps to unfold.
In an outline highlighted by U.S. President Donald Trump, the plan is described as a long-sought path toward a ceasefire and a durable settlement in a region that has seen repeated cycles of violence. Hamas has stated that the agreement includes Israel’s withdrawal from Gaza and a comprehensive hostage-prisoner exchange, while calling on guarantor states to ensure full implementation.
Reactions from leaders and the market
Prime Minister Benjamin Netanyahu signaled readiness to bring the ceasefire accord to Parliament, calling it a “great day for Israel” as Washington announced the preliminary deal. Trump’s public remarks added momentum to the narrative of a breakthrough after months of stalemate on broader regional conflicts, including Ukraine-related sanctions against Russia.
Oil markets responded to the news with a retreat in prices, reflecting a lower war-risk premium as traders anticipated reduced immediate military risk in Gaza. The move comes after a period of cautious optimism amid broader geopolitical tensions, including concerns over Ukraine peace talks and sanctions dynamics.
Historical context: from pre-October 7 to a potential diplomatic reset
Prior to October 7, 2023, West Asia’s geopolitical landscape looked markedly different. The Palestine question had drifted from the center of regional politics, while Iran remained a provocative factor through its axis of resistance. The Abraham Accords, brokered during the Trump administration, reshaped regional alliances by normalizing relations between Israel and several Gulf Arab states. By 2023, Saudi Arabia and other Gulf powers were advancing toward broader normalization, complicating the region’s security calculus.
The current trajectory signals a potential re-entry of Palestine into West Asia’s diplomatic core, with Israel possibly negotiating concessions to reestablish a pre-October 7 framework. The crisis has also tested U.S. strategy in the region as it seeks to balance support for Israel with broader regional stability and ties to Arab partners.
What to watch next
Key questions for investors, negotiators, and observers include the reliability of ceasefire commitments, the pace of hostages’ release, and the conditions surrounding any Israeli withdrawal. Watch for official sign-offs, specifics of the withdrawal lines, verification mechanisms, and the role of guarantor states in ensuring compliance. As the first phase unfolds, the international community will be closely monitoring whether subsequent phases can translate into a durable peace that addresses humanitarian needs and regional security concerns.
