Oil Prices Pull Back From Multi-Year Highs
Oil prices declined on Wednesday, retreating from recent multi-year highs and briefly falling below the $100 per barrel level. The move followed comments from U.S. President Donald Trump suggesting that the United States may be preparing to exit the Iran conflict, while also revealing that Iran’s new leadership has requested a ceasefire.
By 14:51 ET (18:51 GMT), Brent crude futures for June delivery were down 2.6% at $101.25 per barrel. Since the conflict began in late February, Brent had surged to around $120, compared to roughly $70 before the escalation.
Meanwhile, U.S. West Texas Intermediate (WTI) crude fell 1.3% to $100.06 per barrel.
Trump Signals Possible Exit and Ceasefire Talks
Trump stated that Iran’s new leadership had reached out to the U.S. with a request for a ceasefire, highlighting a potential turning point in the conflict. He also indicated that Washington could withdraw from military operations within the next two to three weeks.
However, the president added that any decision would depend on the reopening of the Strait of Hormuz, a key global oil transit route.
Strait of Hormuz Remains Key Market Risk
The Strait of Hormuz, which handles roughly 20% of global oil and gas flows, has been largely closed since the start of the conflict. The disruption has severely reduced tanker traffic and pushed oil prices sharply higher.
Even if a ceasefire is confirmed, uncertainty remains about when and how the strait will fully reopen, keeping markets cautious.
Oil Rally Driven by Supply Disruptions
The closure of the Strait of Hormuz has been a major factor behind the surge in oil prices. Brent crude recently recorded a monthly gain of 42.7%, while WTI rose 51.3% in March, marking its strongest performance since May 2020.
Analysts note that a U.S. withdrawal would not necessarily guarantee safe passage through the strait or prevent further regional tensions.
Uncertainty Over Post-Conflict Stability
Experts suggest that even if U.S. forces withdraw, Iran could continue targeting regional shipping routes, and restoring safe navigation may require broader diplomatic agreements.
Additionally, questions remain about whether the U.S. can consider its mission complete if the strait does not fully reopen following a withdrawal.
U.S. Crude Inventories Rise Unexpectedly
In a separate development, data from the American Petroleum Institute showed a significant increase in U.S. crude stockpiles. Inventories rose by 10.26 million barrels last week, far exceeding expectations for a 1.3 million-barrel decline.
The unexpected build signals weaker demand and adds another layer of complexity to the oil market outlook.
Supply Risks Still Dominate Outlook
Industry experts emphasize that reopening the Strait of Hormuz remains critical for stabilizing global energy markets. Without a full restoration of supply flows, oil prices are likely to remain elevated across major economies.
