Written by The Banking Post
Oil prices fell sharply on Wednesday, reversing earlier gains, as lingering Middle East volatility kept investors on edge despite signs the US-Israeli conflict with Iran may be easing.
Brent crude for June delivery dropped $3.33, or 3.2 percent, to $100.64 per barrel, while US West Texas Intermediate (WTI) crude for May slid $3.34, or 3.3 percent, to $98.04 per barrel.
“The dip is likely due to a lull during Asian trading hours, with profit-taking amid signals from the US that the war may end soon,” said Emril Jamil, senior analyst at LSEG.
Brent futures had already fallen more than $3 on Tuesday after media reports suggested Iran’s president was ready to end the war. US President Donald Trump indicated that military operations could conclude within two to three weeks, signaling a potential wind-down without a formal deal with Iran.
Analysts warned that even if the conflict ends, damage to infrastructure could keep supplies tight. “The flow of tankers won’t resume immediately — shipping costs, insurance, and tanker movements will take time to normalize,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
The Strait of Hormuz, through which 20 percent of global oil and LNG trade flows, remains a critical chokepoint. LSEG analysts noted that despite diplomatic efforts, “continued maritime attacks and explicit threats against energy assets keep supply risks skewed to the upside.”
Recent data underscore the tight supply situation: OPEC oil output dropped 7.3 million barrels per day in March due to export disruptions from the strait’s closure, while US crude production fell sharply in January following a severe winter storm, the Energy Information Administration reported.
Market watchers say oil prices will hinge on how quickly supply chains and tanker flows normalize once the conflict de-escalates.
