Oil prices fell in choppy Asian trade on Wednesday after U.S. President Donald Trump indefinitely extended a ceasefire with Iran, although uncertainty over future peace talks and supply disruptions left markets on edge.
Concerns over ongoing supply disruptions persisted, especially with the Strait of Hormuz remaining closed. A U.S. naval blockade against Iran also remained largely in place, with ship flows through Hormuz remaining scant.
Brent oil futures fell nearly 1% to $97.56 a barrel, while West Texas Intermediate crude futures fell 1.2% to $84.95 a barrel by 01:41 ET (05:41 GMT). Both contracts swung between positive and negative territory earlier in the session.
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Trump announces indefinite extension to Iran ceasefire Trump on Tuesday said he would indefinitely extend the ceasefire with Iran, allowing the two countries to continue peace talks to end the war.
It was not immediately clear whether Iran had agreed to extend the ceasefire, with no official response from the country’s top leaders on the extension. They had previously signaled that no negotiations would take place while the U.S. naval blockade remained.
The status of future U.S.-Iran peace talks remained uncertain, especially after both Tehran and Washington declined to send delegates for more negotiations in Pakistan this week.
The president later claimed that Iran was losing $500 million daily from the closure of Hormuz, and that there could never be a deal with Iran without lifting a naval blockade against the country.
Hormuz is a key point of focus in the conflict, given that the channel supplies roughly 20% of the world’s oil consumption. Disruptions in shipping activity, after Iran effectively blocked the crossing, were a major boost to oil prices since the onset of the conflict in late-February.
US inventories, supply measures in focus Industry data released overnight showed U.S. oil inventories shrank much more than expected in the week to April 17.
American Petroleum Institute data showed weekly crude inventories shrank 4.4 million barrels, much more than expectations for a draw of 1 mb.
The print usually heralds a similar reading from official inventory data, which is due later on Wednesday.
A sustained draw in U.S. inventories comes amid growing concerns over supply disruptions and price increases stemming from the Iran war. The U.S. was also seen undertaking measures to offset this impact, including potential draws from the Strategic Petroleum Reserve.
Axios reported that Trump was considering extending a waiver allowing foreign-flagged cargo ships to move fuel between domestic U.S. ports. Trump had announced the 60-day waiver in mid-March with the goal of allowing more domestic oil distribution to offset the impact of higher oil prices from the Iran war.
U.S. gasoline prices jumped some 40% since the onset of the Iran war.
