Crude oil prices traded lower on Wednesday after rising for three consecutive sessions, as investors assessed geopolitical developments surrounding Iran and awaited further clarity from the high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping.
Despite the decline in early trade, oil prices continued to remain elevated amid concerns over prolonged supply disruptions and uncertainty surrounding the Strait of Hormuz, a critical route for global energy shipments.
Brent crude futures slipped 34 cents, or 0.32%, to trade at US$107.09 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures declined 60 cents, or 0.59%, to US$101.58 per barrel during early Wednesday trading.
Oil markets remained volatile as investors closely monitored the fragile ceasefire situation involving Iran. Recent hopes for a lasting peace agreement weakened after renewed concerns emerged over tensions in the region.
Both Brent and WTI crude benchmarks have largely traded around or above the US$100 per barrel mark since the United States and Israel launched attacks on Iran earlier this year, resulting in Tehran tightening control over the Strait of Hormuz.
The strategic waterway handles nearly one-fifth of global oil and liquefied natural gas flows, making any disruption a major concern for energy markets worldwide.
Oil prices had surged more than 3% in the previous session as fears increased that prolonged tensions could delay the reopening of the strait and further disrupt global supply chains.
Investors are also closely watching the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing later this week.
Trump stated that he does not expect to require China’s assistance in resolving the Iran conflict, even as diplomatic efforts continue to remain uncertain.
China remains the largest buyer of Iranian oil despite pressure from the United States administration, making the summit particularly significant for global energy markets and geopolitical stability.
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Analysts believe ongoing supply disruptions could continue to keep crude oil prices elevated in the coming months.
According to Eurasia Group, the duration of the disruption and supply losses exceeding one billion barrels could result in oil prices remaining above US$80 per barrel for the remainder of the year.
Concerns over tightening supply conditions have continued to provide support to oil markets despite broader economic uncertainties.
Higher oil prices have started impacting the broader global economy, particularly in the United States, where fuel costs have contributed to rising inflationary pressures.
Recent US economic data showed consumer prices rising sharply for a second consecutive month, strengthening expectations that the US Federal Reserve may keep interest rates elevated for an extended period.
Higher borrowing costs could weigh on economic activity and potentially dampen future oil demand, limiting further upside in crude prices.
Market participants are also awaiting official inventory data from the US Energy Information Administration (EIA), scheduled for release later on Wednesday.
According to market sources citing American Petroleum Institute data, US crude oil inventories declined for the fourth consecutive week, while distillate stockpiles also moved lower.
The inventory trends are being closely monitored for further indications regarding supply-demand conditions in the world’s largest oil-consuming nation.
Crude oil prices remain highly sensitive to geopolitical developments involving Iran, supply disruptions in the Strait of Hormuz and broader macroeconomic conditions. While concerns over supply constraints continue to support prices, investors are also watching inflation trends, interest rate expectations and diplomatic developments between the United States and China for further direction in the energy markets.
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Published on: May 13, 2026, 8:27 AM IST
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