Oil prices fall a second day as Trump indicates possible Iran peace deal

Oil prices dropped for the second consecutive day on Wednesday as expectations grew that oil supplies from the crucial Middle Eastern region could start again. This comes after U.S. President Donald Trump suggested that a peace agreement to end the conflict with Iran might be possible. As of 0103 GMT, Brent crude futures for July fell by $1.52, or 1.38%, to $108.35 per barrel, following a 4% decline in the previous session. Meanwhile, U.S. benchmark West Texas Intermediate futures for June decreased by $1.50, or 1.47%, to $100.77, after a 3.9% drop the day before. On Tuesday, Trump unexpectedly announced he would momentarily halt an operation to help guide ships through the Strait of Hormuz, mentioning progress towards a comprehensive agreement with Iran, but he did not provide specific details. Tehran had not responded immediately, as it was very early Wednesday morning there. Nonetheless, Trump stated that the U.S. Navy would maintain its blockade of Iranian ports. The Strait of Hormuz is vital for transporting cargoes that account for about one-fifth of the world’s oil and natural gas supply and has seen significant disruptions since the U.S.-Israeli conflict with Iran began on February 28. This disruption has contributed to rising prices, with Brent trading last week at its highest level since March 2022. “We have mutually agreed that while the blockade will remain fully in effect, Project Freedom ... will be paused for a short time to see if the agreement can be finalized and signed,” Trump shared on social media. His announcement came shortly after U.S. Secretary of State Marco Rubio held a briefing with reporters regarding the initiative announced on Sunday to escort stranded tankers through the strait. On Monday, the U.S. military reported that it had destroyed several Iranian small boats, along with cruise missiles and drones, while guiding two vessels out of the Gulf through the strait. The closure of the Strait of Hormuz has led to a reduction in global inventories as refineries work to compensate for the supply shortfall.