Oil prices retreated from their recent highs on Wednesday, erasing some of the previous session's 4% gains, as traders awaited clarity on the complex negotiations between the United States and Iran amid renewed hostilities that have hampered efforts to reopen the Strait of Hormuz. Brent crude futures fell $1.42, or 1.43%, to $98.16 a barrel, while U.S. West Texas Intermediate crude futures dropped $1.66, or 1.77%, to $92.23.
This decline followed a sharp rise in prices on Tuesday, after the US military launched new strikes in Iran, dashing weekend hopes for an imminent agreement to end the war. Tehran accused Washington of violating the ceasefire by targeting sites near the Strait of Hormuz, while the United States maintained that its strikes were defensive in nature.
Both sides had previously indicated progress in talks aimed at reopening the Strait of Hormuz, a vital waterway for global oil and gas flows, before renewed tensions threatened these efforts, coinciding with Israel's escalation of its bombardment of Lebanon. However, recent reports of liquefied natural gas (LNG) tankers transiting the strait have revived hopes that it could reopen soon, potentially bolstering global supplies.
