Oil Falls 2% as Trump Signals Swift US Exit from Iran Conflict

Oil prices declined on Wednesday, reversing earlier gains as markets reacted to rising U.S. crude inventories and continued geopolitical uncertainty in the Middle East.

Benchmark futures moved lower at settlement, with Brent Crude falling by $2.81, or 2.7%, to close at $101.16 per barrel. West Texas Intermediate also dropped $1.26, or 1.24%, settling at $100.12 per barrel. Meanwhile, May contracts for U.S. crude recorded sharper losses, sliding 3.8% to $97.49 per barrel.

Latest Oil Prices:

WTI Crude • 98.75 -1.37 -1.37%

Brent Crude • 101.2 -2.81 -2.70%

Murban Crude • 103.6 -3.18 -2.98%

Natural Gas • 2.816 -0.003 -0.11%

Gasoline • 3.079 -0.013 -0.42%

Heating Oil • 4.006 -0.051 -1.25%

WTI Midland • 106.0 -0.08 -0.08%

Opec Basket • 123.2 +6.09 +5.20%

Indian Basket • 124.9 +3.70 +3.05%

The decline was driven in part by new data from the U.S. Energy Information Administration, which reported a significant increase in crude oil stockpiles. U.S. inventories rose by 5.5 million barrels to reach 461.6 million barrels in the week ending March 27, far exceeding market expectations of a modest 814,000-barrel increase.

At the key storage hub in Cushing, Oklahoma, inventories rose by an additional 520,000 barrels, adding further downward pressure on prices.

Refinery activity weakened slightly, with lower processing rates and reduced capacity utilization. In contrast, gasoline and distillate inventories, including diesel and heating oil, declined more than expected.

Oil prices had initially risen earlier in the day due to ongoing tensions in the Middle East, before reversing as investors took profits. Reports suggesting a potential de-escalation in the conflict involving Iran also contributed to the downward shift.

U.S. President Donald Trump indicated that military operations could end within two to three weeks, raising cautious optimism about a possible easing of supply disruptions.

Despite this, analysts warn that supply constraints may continue even if the conflict subsides. Damage to infrastructure and ongoing disruptions to shipping routes, particularly through the Strait of Hormuz, a critical passage for global oil and liquefied natural gas, are expected to keep markets tight.

Additionally, production from OPEC declined in March, according to survey data, reflecting reduced exports linked to regional instability.