Oil prices moved lower on Wednesday as traders reacted to signs of progress in diplomatic talks between Washington and Tehran, while improving tanker movements through the Strait of Hormuz also eased supply concerns.
By 04:44 ET (08:44 GMT), Brent crude futures for July delivery had fallen 2.5% to $109.25 per barrel, while U.S. West Texas Intermediate crude futures declined 1.9% to $102.35 per barrel. Both benchmarks had already posted losses of roughly 1% in the previous session.
Hormuz tanker activity boosts confidence on supply flows
According to Reuters, citing LSEG and Kpler shipping data, two Chinese-flagged oil supertankers successfully exited the Strait of Hormuz on Wednesday, encouraging hopes that energy shipments through the key maritime route could begin returning to more normal levels.
The South Korean-flagged tanker Universal Winner was also departing the narrow channel near Iran’s southern coastline, which has effectively remained closed to tanker traffic since the outbreak of the U.S.-Israeli conflict with Iran in late February.
U.S. President Donald Trump told lawmakers on Tuesday evening that the Iran war could end “very quickly.” Trump had earlier indicated that he delayed a planned strike against Iran because negotiations with Tehran appeared to be advancing.
Vice President JD Vance also expressed optimism, saying Iran seemed interested in reaching an agreement.
Iran’s latest peace proposal reportedly called for a halt to military operations across all fronts, the withdrawal of U.S. troops from the region and compensation for wartime damages, according to Iranian state media. Washington has so far rejected earlier proposals, maintaining that ending Iran’s nuclear programme remains a critical requirement for any deal.
Traders focus on upcoming U.S. inventory figures
Attention is now shifting toward official U.S. oil inventory data for additional insight into supply conditions amid ongoing global disruptions.
Figures released by the American Petroleum Institute showed a larger-than-expected draw of 9.1 million barrels last week, compared with market expectations for a decline of 3.4 million barrels. API figures are often viewed as a leading indicator for the official U.S. government inventory report due later on Wednesday.
U.S. stockpiles are believed to have declined significantly in recent weeks as exports increased to help offset supply disruptions in overseas markets. Trump has also authorised the release of 172 million barrels from the Strategic Petroleum Reserve to reduce the impact of supply shocks linked to the Iran conflict.
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