Oil prices fell for a second consecutive day on Wednesday amid expectations that peace talks between the United States and Iran may resume, potentially easing supply disruptions caused by the closure of the Strait of Hormuz.
Brent crude futures dropped 52 cents, or 0.55%, to $94.27 a barrel, after declining 4.6% in the previous session. U.S. West Texas Intermediate (WTI) crude fell $1.04, or 1.1%, to $90.24, following a sharp 7.9% drop a day earlier.
Market sentiment improved after U.S. President Donald Trump indicated that talks to end the conflict involving the U.S., Israel, and Iran could resume in Pakistan within the next two days. The possibility of renewed negotiations has raised hopes of restoring oil and fuel flows from the Middle East.
The ongoing conflict has severely disrupted transit through the Strait of Hormuz, a critical route for global energy supplies. Although a two-week ceasefire is in place, shipping activity remains significantly below normal levels.
Despite diplomatic signals, uncertainty persists on the ground. A U.S. naval vessel reportedly stopped two oil tankers from leaving Iran on Tuesday, highlighting continued tensions in the region.
Analysts say the market remains cautious. “While diplomatic developments point to possible progress, the actual supply situation remains uncertain,” the Schork Group noted, adding that prices continue to reflect risks of ongoing disruptions rather than a full recovery in supply.
Further pressure on supply expectations comes as the U.S. is set to allow certain sanctions waivers on Iranian and Russian oil to expire, potentially limiting additional supply to global markets.
Investors are also closely watching upcoming U.S. inventory data, with early estimates suggesting a rise in crude stockpiles alongside declines in gasoline and distillate inventories.