ISLAMABAD: Global oil prices declined for a second straight session on Wednesday, as expectations of renewed diplomacy between the United States and Iran eased fears of prolonged supply disruptions.
Brent crude dropped to $94.27 per barrel after a sharp fall in the previous session, while U.S. West Texas Intermediate (WTI) slipped to $90.24, extending earlier losses.
Market sentiment improved after Donald Trump signaled that stalled talks with Iran could resume in Pakistan within days.
Investors are increasingly betting that renewed negotiations could help de-escalate tensions and eventually restore oil flows from the region.
The ongoing conflict has severely disrupted shipments through the Strait of Hormuz—a critical route for energy exports to Asia and Europe. Although a temporary ceasefire is in place, vessel traffic remains significantly below normal levels, keeping supply concerns alive.
Analysts caution that despite optimism around diplomacy, the situation on the ground remains uncertain. Limited tanker movement and continued restrictions highlight that the market is still pricing in the risk of further disruptions rather than a full recovery in supply.
Adding pressure, Washington is reportedly allowing key sanctions waivers on Iranian and Russian oil to expire, potentially tightening global supply even further.
Traders are now closely watching upcoming U.S. inventory data, which could offer further direction. Early estimates suggest crude stockpiles have risen for a third consecutive week, while gasoline and distillate inventories may have declined.
Overall, while diplomatic signals are cooling markets for now, volatility is expected to persist until there is clear progress on the geopolitical front.
