Oil prices fell by more than 3% on Wednesday, erasing earlier gains as market anxiety persists over volatile conditions in the Middle East, despite reports suggesting that the U.S.-Israeli war on Iran may be nearing an end.
اضافة اعلان
Brent crude for June delivery dropped by $3.33, or 3.2%, to $100.64 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) futures for May delivery slid by $3.34, or 3.3%, to $98.04 per barrel.
Prices had risen earlier on Wednesday but reversed course as uncertainty regarding the conflict intensified, prompting investors to engage in profit-taking.
"This decline is likely a result of the market cooling during Asian trading hours, with profit-taking occurring amidst signals from the U.S. about a potential near-term end to the war," said Emril Jamil, an analyst at the London Stock Exchange Group (LSEG).
Brent crude futures for June had already settled more than $3 lower on Tuesday following unconfirmed media reports suggesting the Iranian president is ready to end the war.
U.S. President Donald Trump told reporters on Tuesday that the United States could conclude the military campaign within two to three weeks, noting that Iran is not obligated to sign a formal deal to end the conflict. These were his clearest comments yet regarding his desire to end the month-long war.
However, analysts argue that even if the war concludes, damage to infrastructure is likely to cause continued supply shortages. Priyanka Sachdeva, senior market analyst at Phillip Nova, stated that oil prices will depend on how quickly supply chains return to normal.
"Even if the conflict begins to recede, tanker flows will not resume immediately... shipping costs, insurance, and tanker movements will take time to normalize," she added, noting that actual damage to oil infrastructure can only be assessed after the fighting stops.
A report published by the Wall Street Journal quoted Trump saying he might end the war before the reopening of the Strait of Hormuz, a vital maritime route through which 20% of global oil and liquefied natural gas (LNG) trade passes.
LSEG analysts noted: "Even with reported ongoing diplomatic channels and intermittent comments from the U.S. administration predicting a swift end to the conflict, a combination of limited tangible diplomatic progress, continued naval attacks, and explicit threats to energy assets keeps supply risks tilted to the upside."
Reuters
