Oil prices extended losses on Wednesday, hovering near four-month lows as expectations of smoother crude flows through the Strait of Hormuz eased earlier supply disruption fears tied to Middle East tensions.
Brent crude futures slipped 0.5% to US$76.71 a barrel, while US West Texas Intermediate fell 0.5% to US$72.85, both extending Tuesday’s near 1% drop. The benchmarks had earlier touched their lowest levels since early March.
Sentiment was weighed by signs that more tankers previously stranded in the Gulf are resuming movement through the Strait of Hormuz following diplomatic progress between Washington and Tehran, reducing immediate concerns over supply bottlenecks.
Market participants also pointed to easing geopolitical risk premiums after Washington granted Iran a 60-day sanctions waiver following early-stage peace discussions, alongside reduced tensions in parts of the Middle East.
Analysts noted that expectations of improving crude logistics and potential further nuclear negotiations are reinforcing a near-term bearish outlook for oil prices, with some projecting a possible return to pre-conflict pricing levels if diplomatic momentum continues.
Additional pressure came from inventory data showing a surprise decline in US crude stockpiles, although traders largely focused on broader macro signals, including easing shipping disruptions and improving export flows from key Middle Eastern producers.
Despite the current weakness, uncertainty remains over the durability of the geopolitical truce, with investors closely watching whether shipping normalisation through the Strait of Hormuz can be sustained and how quickly regional output can stabilise.
Reuters
