Oil prices fell for the second day in a row on Wednesday as hopes increased that supplies from the Middle East could improve if a possible US–Iran peace deal happens. The drop came after comments from US President Donald Trump suggested there may be progress toward ending the conflict.
Trump said on Tuesday that an operation to escort ships through the Strait of Hormuz would be paused for a short time, as there were signs of a broader agreement with Iran. However, he did not share details. There was no immediate response from Tehran.
Brent crude for July delivery fell $1.52, or 1.38%, to $108.35 per barrel, after dropping 4% in the previous session. U.S. West Texas Intermediate (WTI) crude for June declined $1.50, or 1.47%, to $100.77, following a 3.9% fall on Tuesday.
Trump also said the US Navy would continue its blockade of Iranian ports. The Strait of Hormuz - which carries about one-fifth of the world’s oil and gas - has been mostly shut since the US-Israel conflict with Iran began on February 28. This disruption had pushed global oil prices higher, with Brent hitting its highest level since March 2022 last week.
In a social media post, Trump said both sides had agreed that while the blockade would stay in place, “Project Freedom” would be paused temporarily to allow time for the agreement to be finalised.
His remarks came after Marco Rubio briefed reporters about the escort plan announced earlier. On Monday, the US military said it destroyed several Iranian boats, along with cruise missiles and drones, while helping two tankers move out of the Gulf.
On Tuesday, the US downplayed the chances of the conflict escalating again. Defense Secretary Pete Hegseth confirmed that the ceasefire, which began nearly a month ago, is still holding. Meanwhile, General Dan Caine said Iran’s recent attacks on ships in the Persian Gulf and the UAE do not count as breaking the ceasefire.
Experts remain cautious about what comes next. Haitong Futures said the current ceasefire may not last long, and if US-Iran talks fail, tensions could rise again, pushing oil prices higher.
Nuvama Institutional Equities also warned that if the Strait of Hormuz remains shut for a longer period — which normally handles around 20 million barrels of oil per day — crude prices could jump to between $110 and $150 per barrel.
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