Oil markets retreat on diplomatic progress, though traders warn of lingering volatility as Middle East shipping risks persist….
Global oil prices eased on Wednesday as renewed diplomatic efforts between the United States and Iran helped calm fears of an immediate supply disruption in the Middle East.
Brent crude fell to $105 per barrel, down from $111 in the previous session, according to data from Oilprice.com. West Texas Intermediate (WTI) also declined, slipping to $98 from $105 a day earlier.
The pullback followed comments from US President Donald Trump, who said negotiations with Iran were approaching a final stage, although he cautioned that further escalation remained possible if talks collapse. Reports from Reuters also indicated that Trump warned of continued strikes unless a diplomatic agreement is reached.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei, meanwhile, said Tehran was open to establishing protocols to ensure safe maritime traffic in coordination with other coastal states, though he did not provide further details.
Despite the apparent diplomatic progress, energy markets remain on edge as traders assess the durability of any potential agreement and its impact on crude supply flows from the region.
Some analysts warned that the market may be underestimating the risk of prolonged disruptions, with projections suggesting Brent could climb toward $120 per barrel in the short term if tensions flare again.
Energy consultancy Wood Mackenzie went further, estimating that crude prices could spike as high as $200 per barrel in a worst-case scenario if the Strait of Hormuz is significantly disrupted for an extended period.
The Strait remains one of the world’s most critical energy corridors, handling roughly a fifth of global oil shipments. Recent months of heightened tensions have already disrupted maritime movement, with shipping traffic falling sharply compared to pre-conflict levels.
Before the crisis escalated, between 125 and 140 vessels passed through the waterway daily. That figure has now dropped to around 10 ships per day, according to vessel tracking data from Kpler and SynMax, reflecting ongoing security concerns.
Reuters also reported that several large crude carriers have recently resumed movement through the strait after prolonged delays in the Gulf, carrying millions of barrels of Middle Eastern oil bound for Asian markets.
Among them is the South Korean-flagged Very Large Crude Carrier Universal Winner, which is transporting about 2 million barrels of Kuwaiti crude to Ulsan, where it is expected to arrive in early June.
Market observers say the cautious resumption of shipping suggests gradual adjustment to new transit protocols, although uncertainty remains high as geopolitical tensions continue to shape energy flows.
Analysts note that while easing prices may signal short-term relief for importers, the oil market remains highly sensitive to any renewed disruption in Middle East supply routes.
