Video|23 January 2025

MENA | Israel and Hamas Ceasefire Agreement: What’s Next?

Scott Livermore

Chief Economist & Managing Director

Israel and Hamas reached a multi-stage ceasefire agreement with the first stage becoming effective on 19th January and establishing a 6-week ceasefire and mandating the release of hostages and prisoners. Although significant domestic political pressure in Israel renders the agreement fragile, it marks meaningful progress in de-escalating regional tensions, especially when paired with Lebanon’s new leadership advancing an Israel-Hezbollah truce. If these deals hold, we are likely to revise up our current GDP forecasts for 2025 of 3.4% in Israel and 0.8% in Lebanon.

Prompted by US sanctions on Russian oil shipment, Brent crude rose above $80 per barrel last week. Markets remain fearful of further sanctions and that a stricter US policy towards Iran could also support oil prices. However, we expect the Israel-Hamas ceasefire and President Trump’s energy policy stance push down oil prices from current levels.

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