Oil Prices Swing as Trump Signals Iran Exit and Strait of Hormuz Stays Disrupted

Crude Benchmarks Retreat After Sharp Monthly Rally

In volatile trading on Wednesday, U.S. West Texas Intermediate (WTI) crude for May delivery fell 1.15% to $100.21 per barrel as of 6:15 a.m. ET. Brent crude for June delivery pared earlier losses to trade around $104 per barrel.

The moves followed an exceptionally strong month for crude. The global oil benchmark surged more than 60% last month, marking its strongest monthly rally since 1988. The May WTI contract had settled about 5% higher on Tuesday at $118.35 per barrel before reversing part of those gains.

Prices dropped after Trump said Tuesday evening that he expected U.S. military forces to leave Iran in “two or three weeks” and indicated there was “no reason” for the U.S. presence to continue. He also suggested that Iran “doesn't have to make a deal” because “it's a new regime” that he described as “much more accessible,” and asserted that he had prevented Iran from obtaining a nuclear weapon.

Later on Tuesday, White House spokesperson Karoline Leavitt said in a post on X that Trump would deliver a national address on Iran at 9 p.m. ET Wednesday to provide an “important update.”

Ongoing Conflict Keeps Supply Risks Elevated

Despite the prospect of a near-term U.S. exit from Iran, the underlying conflict continues to weigh on global energy supply. The U.S.-Israeli campaign against Iran, which began on February 28, has caused a severe disruption to energy flows and heightened concerns for an economy heavily reliant on Middle Eastern oil.

Iran has effectively halted shipments through the Strait of Hormuz, a critical maritime chokepoint linking the Persian Gulf and the Gulf of Oman that previously handled about 20% of global oil flows. The continued closure of this route has intensified fears over supply security and contributed to recent price volatility.

Military hostilities remain active. Iran’s Revolutionary Guards announced plans to begin attacking U.S. companies in the region from Wednesday, listing 18 firms including Google, Microsoft, Apple, Intel, IBM, Tesla and Boeing. On Wednesday, Iranian drones targeted fuel tanks at Kuwait International Airport, causing a large fire and damage to the tanks.

Iranian Foreign Minister Abbas Araghchi told Al Jazeera on Tuesday that messages had been exchanged with the United States directly or via regional countries, but stated that these contacts did not amount to “negotiations.”

FAQ

Why did oil prices fall on Wednesday?
Oil prices declined as investors reacted to President Trump’s comments that U.S. forces could leave Iran within “two or three weeks,” which was interpreted as potentially easing future geopolitical risk, despite ongoing supply disruptions and conflict in the region.

How significant is the Strait of Hormuz for global oil flows?
Before the current conflict, the Strait of Hormuz handled about 20% of global oil flows. Its effective closure by Iran has created a severe disruption to energy supplies and is a key factor behind recent price volatility.

What recent price levels have WTI and Brent reached?
As of 6:15 a.m. ET on Wednesday, WTI for May delivery was at $100.21 per barrel, down 1.15%, and Brent for June delivery was around $104 per barrel. The previous day, the May WTI contract had settled about 5% higher at $118.35 per barrel.