Key Takeaways

• Modest pullback: Brent crude fell 0.4% to $107.36 per barrel, while WTI eased 0.3% to $101.91 — following Tuesday’s 3%+ surge.
• Three days of gains: Both contracts had rallied for three consecutive sessions.
• Ceasefire on “life support”: Trump’s rejection of Iran’s response to peace proposals continues to keep markets on edge.
• Hormuz to stay shut: The U.S. Energy Information Administration expects the strait to remain effectively closed through late May.
• Massive stockpile drawdown: EIA forecasts global stockpiles could shrink by 2.6 million barrels per day this year.
• Brent forecast: The agency expects Brent prices to average around $106 per barrel in May and June.
• 20% of global oil: The strait normally handles roughly a fifth of global oil consumption.
• Trump-Xi summit imminent: The president arrives in Beijing Wednesday, with bilateral talks Thursday and Friday.
• Summit agenda: Discussions to cover the Iran conflict, trade tensions, tariffs, and energy security.

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Oil prices edged down during Asian trading on Wednesday after rallying for three straight sessions, as traders weighed the continued disruption to shipping through the Strait of Hormuz and assessed fresh U.S. inventory numbers.

As of 20:19 ET (00:19 GMT), Brent oil futures expiring in July fell 0.4% to $107.36 per barrel, while West Texas Intermediate (WTI) crude futures inched 0.3% lower to $101.91 per barrel.

Both contracts had jumped more than 3% in the previous session.

Hormuz Closure to Extend Through Late May

Markets remained on edge after U.S. President Donald Trump described prospects for a ceasefire with Iran as being on “life support” and rejected Tehran’s latest response to U.S.-backed peace proposals — raising fears that the conflict could drag on indefinitely.

The Strait of Hormuz, through which roughly a fifth of global oil consumption normally flows, remains largely shut to commercial traffic after Iran tightened restrictions following the outbreak of war earlier this year.

The U.S. Energy Information Administration said on Tuesday it now expects the strait to remain effectively closed through late May, forcing a much steeper drawdown in global inventories than previously forecast.

The agency estimated global stockpiles could shrink by 2.6 million barrels per day this year, while Brent prices may average about $106 per barrel in May and June.

All Eyes on Trump-Xi Summit

Markets were also closely tracking U.S. President Donald Trump’s scheduled May 14-15 summit with Xi Jinping in Beijing, where discussions are expected to cover the Iran conflict, trade tensions, tariffs, and energy security.

Trump is due to arrive in Beijing on Wednesday, with bilateral meetings and a state banquet scheduled for Thursday, followed by further talks on Friday.