Oil prices fell for a second day on Wednesday after US President Donald Trump indicated progress toward a possible peace deal with Iran. This deal could ease supply disruptions in the Middle East.
Brent crude futures for July dropped $1.52, or 1.38%, to $108.35 a barrel by 0103 GMT. This followed a 4% fall in the previous session.
US West Texas Intermediate crude for June fell $1.50, or 1.47%, to $100.77 a barrel. Additionally, it had closed 3.9% lower on Tuesday.
Trump said Tuesday that the United States would briefly pause an operation to escort ships through the Strait of Hormuz. He cited progress toward a comprehensive agreement with Iran as the reason for the pause.
There was no immediate reaction from Tehran early Wednesday. Trump said the US Navy blockade of Iranian ports would remain in force.
The Strait of Hormuz carries cargoes equal to about one-fifth of the global oil and natural gas supply. However, it has been largely cut off since the US-Israeli war against Iran began on February 28.
The disruption pushed Brent to its highest level since March 2022 last week.
Trump wrote on social media that “Project Freedom” would be paused for a short period. This pause is to see whether the agreement could be finalised and signed.
The announcement came hours after US Secretary of State Marco Rubio briefed reporters on the escort effort for stranded tankers.
US crude inventories fell by 8.1 million barrels in the week ended May 1. Meanwhile, gasoline stocks dropped 6.1 million barrels, and distillate inventories fell 4.6 million barrels, market sources said, citing American Petroleum Institute figures.
