Oil prices held relatively steady on Wednesday as markets weighed fresh signals from US President Donald Trump suggesting a potential end to the ongoing Iran conflict within weeks. Brent crude hovered below $105 per barrel, while West Texas Intermediate traded near $102, after a sharp drop in the previous session.
The relative calm in prices reflects a tug-of-war between hopes of de-escalation and persistent geopolitical risks. Trump indicated that US forces could withdraw from Iran in “two to three weeks,” even suggesting that a formal agreement with Tehran may not be necessary to end hostilities. However, his shifting stance — alternating between optimism on a deal and warnings of further military escalation — has kept traders cautious.
Despite Washington's signals, Iran has downplayed the likelihood of imminent negotiations. Foreign Minister Abbas Araghchi stated that while informal messages have been exchanged, no official peace talks are underway. Tehran has also laid out key conditions, including retaining control over the strategically vital Strait of Hormuz.
The lack of clarity on diplomatic progress has left markets in a wait-and-watch mode, particularly given the continued military build-up in the region, including additional US deployments.
Supply Risks Keep Markets Supported
Even if a ceasefire materialises quickly, disruptions to global energy flows are unlikely to resolve overnight. The Strait of Hormuz — a critical artery for global oil and gas shipments — has seen reduced traffic, pushing up prices and fuelling inflation concerns worldwide.
While vessel movement through the strait has shown modest improvement in recent days, infrastructure damage and security risks remain key overhangs. Analysts warn that restoring normal supply chains could take weeks, if not longer. Calls for restraint are growing louder. China and Pakistan have jointly urged an immediate ceasefire and the protection of shipping routes, outlining a broader plan to stabilise the Gulf region.
Meanwhile, rising fuel prices — with US gasoline crossing $4 per gallon — are adding domestic pressure on the White House to bring the conflict to a swift conclusion.
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