Oil prices edged lower on Wednesday after US President Donald Trump said the conflict with Iran could end “very quickly”, easing some concerns in global energy markets even as disruptions to Middle East supply routes continued.
Brent crude futures fell 45 cents, or 0.4 per cent, to $110.83 a barrel in early trading, while US West Texas Intermediate crude slipped 27 cents, or 0.3 per cent, to $103.88 a barrel.
The decline followed losses of nearly $1 on Tuesday after US Vice President JD Vance said talks between Washington and Tehran had shown signs of progress and that neither side appeared eager to return to military escalation.
Investors remain focused on negotiations involving the United States, Iran and regional Gulf powers after Trump announced this week that a planned American military strike on Iran had been postponed to allow diplomatic efforts to continue.
Despite the softer tone from Washington, traders remain cautious as the conflict has already triggered major disruptions to global oil flows. The war involving US and Israeli forces against Iran has effectively shut down traffic through the Strait of Hormuz, one of the world’s most important energy corridors.
According to the International Energy Agency, the closure of the strait represents the largest oil supply disruption currently facing the global market. Roughly one-fifth of the world’s oil shipments normally pass through the narrow waterway linking the Persian Gulf to international markets.
Shipping companies and energy traders continue to monitor tanker movements closely as fears persist over delays, insurance costs and the availability of crude supplies. Analysts say any prolonged interruption could tighten global inventories further and increase pressure on importing nations already facing higher fuel costs.
Market participants also remain uncertain about whether recent diplomatic signals represent a genuine breakthrough or only a temporary pause in hostilities. While Trump expressed optimism about reaching an agreement with Tehran, no formal settlement has yet been announced.
Energy analysts noted that volatility is likely to remain elevated until there is clarity on both the negotiations and the reopening of shipping lanes in the Gulf. Several countries in Asia and Europe remain heavily dependent on crude exports transported through the Strait of Hormuz, making developments in the region critical for the wider global economy.
The recent swings in oil prices have also renewed inflation concerns in major economies, where central banks are closely watching energy markets for signs of renewed price pressure.
Although Wednesday’s decline offered some relief to markets, traders said geopolitical tensions in the Middle East continue to dominate sentiment and could quickly reverse the downward move in crude prices if talks falter or supply disruptions deepen.
