- Oil prices were steady amid Trump's threat to resume strikes on Iran, keeping risks high
- Brent crude dropped below $111 per barrel, WTI traded near $104 despite recent gains
- Trump gave Iran "two or three days" to accept US peace terms before potential action
Oil prices were little changed on Wednesday as traders assessed President Donald Trump's latest threat to resume military strikes against Iran, keeping the geopolitical risk premium firmly embedded in crude markets. Brent crude slipped below $111 a barrel after easing 0.7% in the previous session, while West Texas Intermediate traded near $104. Despite the modest pullback, both benchmarks remain sharply higher as tensions in the Middle East continue to disrupt one of the world's most critical oil corridors.
Trump warned that if Tehran failed to accept US peace terms, “we may have to give them another big hit,” less than 24 hours after saying he had called off a planned attack.
‘Two Or Three Days' For A Decision
The remarks reinforced the possibility of renewed hostilities, though markets have grown increasingly cautious about reacting to Trump's shifting rhetoric.
Since a ceasefire was announced on April 8, the US president has repeatedly threatened military action only to soften his stance shortly afterward. That pattern has made traders reluctant to push prices significantly higher without concrete signs that fighting is set to resume.
When asked how long he would give Iran to respond, Trump said the timeline could be “two or three days, maybe Friday, Saturday, Sunday. Something maybe early next week.”
Supply Concerns Elevated
Now in its 12th week, the conflict has severely curtailed shipping through the Strait of Hormuz, the strategic chokepoint that normally carries roughly a fifth of global crude supply.
The US also seized another Iran-linked tanker in the Indian Ocean overnight, according to a report by The Wall Street Journal, marking at least the third such action targeting Tehran's shadow fleet.
At the same time, NATO is reportedly discussing whether to escort commercial vessels if the strait remains effectively closed beyond early July. Such a move could accelerate the return of supply to global markets and potentially ease some of the current risk premium.
Support for oil prices also came from signs of tightening US supplies. Industry data showed crude inventories fell by 9.1 million barrels last week, which, if confirmed by official figures, would mark the largest drawdown since September.
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