WTI slides over 5%, snapping a four-day rally as traders react to signs of progress in US-Iran negotiations.
Reports of renewed tanker movement through the Strait of Hormuz help ease fears of a prolonged supply shock.
Pakistan-led mediation efforts raise hopes for a potential agreement between Washington and Tehran.
West Texas Intermediate (WTI) crude Oil plunges more than 5% on Wednesday, snapping a four-day winning streak as traders r$USDC eact to fresh geopolitical headlines that raised hopes for a potential agreement to end the US-Iran war and reopen the Strait of Hormuz. At the time of writing, WTI trades around $96.76 per barrel.
US President Donald Trump said on Wednesday that negotiations with Iran were in the final stages, though he warned that military action remained possible if no deal is reached. “There’s more fighting to come unless Iran gets smart,” Trump said.
Diplomatic efforts mediated by Pakistan continue as Washington and Tehran work to finalize the text of a possible agreement. According to Al Hadath, citing sources, Pakistani army leader Asim Munir may travel to Iran on Thursday to announce the final version of the agreement.
Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy said transit through the Strait of Hormuz remains ongoing with permits and coordination from Iranian authorities. The IRGC added that 26 vessels, including oil tankers, container ships and other commercial vessels, transited through the Strait over the past 24 hours.
These developments helped ease immediate supply disruption fears and contributed to the intraday pullback in crude prices, while Reuters reported that several supertankers carrying around 6 million barrels of crude successfully exited the Strait this week.
However, broader supply concerns remain elevated as the Strait of Hormuz continues to operate well below normal capacity, limiting deeper declines in Oil prices. At the same time, the fragile nature of negotiations and persistent disagreements over Iran’s nuclear program continue to keep market uncertainty elevated.
On the data front, the US Energy Information Administration (EIA) reported that Crude Oil inventories fell by 7.864 million barrels in the week ended May 15, significantly larger than market expectations for a 2.9 million-barrel draw and following the previous week’s 4.306 million-barrel decline.
