Oil prices extend slide as Trump flags possible Iran peace deal
LONDON - Oil prices extended declines on Wednesday on the potential release of bottled-up supply from the Middle East after U.S. President Donald Trump signalled a possible deal to end the war with Iran.
Brent crude futures fell $6.70, or 6.1%, to $103.17 a barrel by 0856 GMT after touching their lowest in almost two weeks. U.S. West Texas Intermediate lost $6.77, or 6.6%, to $95.50. Both benchmarks had shed about 4% in the previous session.
The supply loss from halted marine traffic through the Strait of Hormuz since February has driven up oil prices, with Brent trading last week at its highest since March 2022.
However, Trump said on Tuesday that he would briefly pause an operation to escort ships through the strait, citing progress towards a comprehensive deal with Iran. He did not disclose details but added that the U.S. Navy would continue its blockade of Iranian ports.
Iran, meanwhile, said it would only accept a fair and comprehensive agreement, with Foreign Minister Abbas Araqchi not directly addressing Trump's offer of a pause in U.S. escorts for ships.
The U.S. military had said on Monday that it destroyed several Iranian small boats as part of the efforts to help stranded ships to exit the narrow waterway.
The Strait of Hormuz closure has resulted in a drawdown in global oil and fuel inventories as refineries try to offset production shortfalls.
U.S. crude oil inventories fell for a third week, while gasoline and distillate stocks also declined, market sources said on Tuesday, citing American Petroleum Institute figures.
Crude stocks fell by 8.1 million barrels in the week ended May 1, the sources said. Gasoline inventories were down by 6.1 million barrels from a week earlier and distillate inventories fell by 4.6 million barrels, the sources said.
Official numbers from the EIA, the statistical arm of the U.S. Department of Energy, are due at 1430 GMT.
(Reporting by Shadia NasrallaAdditional reporting by Helen Clark in Melbourne and Jeslyn Lerh in SingaporeEditing by David Goodman)
Copyright Reuters or USA Today Network via Reuters Connect.
This story was originally published May 6, 2026 at 2:00 AM.