Oil prices slipped on Wednesday after comments from U.S. President Donald Trump suggesting the ongoing conflict with Iran could end “very quickly,” easing immediate fears of prolonged supply disruption in the Middle East.
Brent crude oil, the international benchmark for Nigerian crude oil, fell by 88 cents to $110.40 per barrel while U.S. West Texas Intermediate (WTI) declined 67 cents to $103.48 a barrel as traders reacted to signs of possible diplomatic progress.
Despite the decline, the market remains highly volatile due to continued concerns surrounding the Strait of Hormuz, a critical shipping route responsible for nearly one-fifth of global oil and LNG flows.
Tanker movements through the route remain significantly below normal levels while global crude inventories continue to tighten.
Reuters reported that investors remain cautious because peace negotiations between Washington and Tehran are still fragile.
Trump indicated that military action could resume if talks fail, keeping geopolitical risk premiums embedded in oil prices.
The International Energy Agency (IEA) and OPEC have both warned about tightening market conditions. OPEC recently reduced its 2026 oil demand growth forecast due to the economic impact of elevated fuel prices and ongoing supply disruptions tied to the Hormuz crisis.
Meanwhile, U.S. crude inventories recorded a fifth consecutive weekly decline, adding to concerns that supply shortages could intensify if Middle East exports remain constrained.
Citi analysts cited by Reuters said Brent crude could still rebound toward $120 per barrel if disruptions persist longer than expected.
In a separate Reuters report, Saudi Aramco CEO Amin Nasser warned that the oil market could lose around 100 million barrels weekly if disruptions through the Strait of Hormuz continue at current levels.
The recent volatility has also prompted governments to intervene. The Trump administration last week approved additional releases from the U.S. Strategic Petroleum Reserve (SPR) to calm global markets amid rising fuel prices.
Overall, oil traders are balancing hopes of a ceasefire against the reality of tight supplies, falling inventories and geopolitical uncertainty that continue to dominate the global energy market.