Oil prices fell on Wednesday, reversing a four percent rally from the previous session, as traders waited for clearer signals on US-Iran negotiations following a fresh round of military strikes that has complicated efforts to reopen the Strait of Hormuz.
Brent crude futures dropped $1.52, or 1.53%, to $98.06 a barrel by 06:33 GMT, while US West Texas Intermediate fell $1.90, or 2.02%, to $91.99 a barrel.
Tuesday’s surge came after the US military launched new strikes on Iran, dealing a blow to optimism that had built at the start of the week around the prospect of a deal to end the conflict. Iran said the strikes, which targeted sites near the Strait of Hormuz, violated an existing ceasefire. Washington described them as defensive in nature. Israel’s intensified bombardment of Lebanon added further pressure on regional peace efforts.
The April ceasefire, which held for three months, had generated cautious progress in talks aimed at reopening Hormuz, a critical artery for global oil and gas flows. The renewed fighting now threatens to unravel those discussions.
Some optimism remains. Reports that a handful of liquefied natural gas tankers passed through the strait in recent days lifted expectations that the waterway could reopen before long, which would add to global supply and weigh on prices.
