Oil Slips in Choppy Trade Ahead of Trump Speech on Iran War
Oil fell in volatile trading on Wednesday as investors focused on whether U.S. President Donald Trump will signal an imminent end to the war in Iran. West Texas Intermediate (WTI) futures slid 1.2% to settle just above $100 a barrel, after at one point dropping as much as about 4.8% during the session.
The market move followed a Truth Social post from Trump early Wednesday claiming Tehran had asked for a ceasefire, pushing prices lower as traders looked for any prospect of renewed flows through the Strait of Hormuz. The critical chokepoint has been effectively blocked by Iran since the conflict began in late February, tightening global supply expectations and amplifying price swings. Iran rejected the framing, saying the waterway would not be reopened based on what it described as the U.S. leader’s “absurd displays,” and that the future of the transit route would be decided by Iran and Oman.
A White House official said Trump is expected to use a prime-time address later Wednesday to highlight U.S. military achievements and argue that operations could conclude within two to three weeks. Even so, uncertainty remains high: crude is still about 40% above levels seen before March as the war continues to constrain traffic through Hormuz, which carries about a fifth of the world’s oil. The International Energy Agency has described the disruption as the largest supply shock on record, and prices for some fuels have at times exceeded $200 a barrel.
If the U.S. does withdraw, markets are still grappling with how quickly — or whether — Hormuz traffic can resume. Trump has repeatedly suggested U.S. allies would need to help secure the strait. Any meaningful increase in regional energy output would also take time, though a détente would reduce the risk of further damage to infrastructure.
Market positioning is beginning to reflect both scenarios. The value of several deferred crude contracts has weakened in recent sessions, a sign some traders are hedging for higher supply in the coming months. Volatility, however, remains near multi-year highs, with many investors cutting position sizes to reduce exposure to extreme intraday moves.
The war-driven jump in energy prices has also revived inflation concerns. U.S. retail gasoline prices this week rose above $4 a gallon for the first time since August 2022, adding to political pressure on the White House as consumers face higher pump costs.
Trump has repeatedly vacillated between saying an Iran deal is near and warning he is prepared to expand military operations. A third U.S. aircraft carrier strike group is reported to be heading to the Middle East, keeping escalation risk in play. The wide range of potential outcomes has driven heavy options activity, with investors pricing scenarios ranging from a sharp market downturn to outsized spikes in crude.
On the physical side, U.S. crude stockpiles rose by about 5.5 million barrels, the highest level since June 2023, according to weekly Energy Information Administration data. Several Atlantic-linked crude grades also hit fresh multi-year highs as buyers sought substitutes for Middle Eastern supplies constrained by the conflict.
U.S. officials have not publicly specified which Iranian counterparts they are engaging. Trump also dispatched Vice President JD Vance to deliver an ultimatum to Tehran, warning it must agree to a deal or face attacks on key infrastructure.
Iranian President Masoud Pezeshkian said in a letter to Americans on Wednesday that Iran did not choose the conflict, describing its actions as a measured response grounded in what he called legitimate self-defense, not an initiation of war.
Despite the renewed talk of de-escalation, attacks continued on Wednesday. An oil tanker was hit near Qatar, according to a U.K. naval group, which said the incident caused a fire that was later extinguished and that no environmental damage was reported.
WTI for May delivery settled down 1.2% at $100.12 a barrel in New York. Brent for June settlement fell 2.7% to $101.16 a barrel.
Source : Newsmaker.id
