Oil prices moved lower on Wednesday, extending recent losses after signals from the U.S. administration pointed toward a potentially shorter timeline for the conflict with Iran. Front-month Brent for June fell $2.91, or 2.8%, to $101.06 per barrel after touching an intraday low of $98.35. U.S. West Texas Intermediate (WTI) for May declined $1.96, or roughly 1.9%, to $99.42, off session lows near $96.50.
The pullback follows comments suggesting the conflict could wind down in the near term, easing concerns around prolonged supply disruptions. Market participants increasingly expect efforts to prevent supply tightness from extending into peak U.S. gasoline demand season in mid-May, a period that typically carries heightened political and economic sensitivity.
Despite the softer price action, uncertainty remains elevated. Conflicting signals continue to emerge around the status of potential ceasefire discussions, particularly regarding the reopening of the Strait of Hormuz, which has been a key driver of recent supply constraints.
Even in the event of de-escalation, a normalization of flows is expected to take time. Analysts note that clearing vessel backlogs and restoring production and export capacity would likely be gradual, keeping near-term supply tight.
Recent data highlights the extent of disruption already in the system. OPEC output saw a significant decline in March as storage constraints and export limitations forced production cuts. Additional supply-side pressure has also come from weather-related declines in U.S. production earlier in the year.
Meanwhile, U.S. inventory data showed a larger-than-expected build in crude stocks last week, adding further pressure to prices. At the same time, Middle Eastern crude remains elevated in global markets, with expectations that key producers may raise official selling prices to Asia in the near term.
Overall, while easing geopolitical rhetoric has weighed on prices in the short term, the market continues to balance expectations of de-escalation against ongoing supply disruptions and a potentially slow recovery in global oil flows.