Oil Prices Fall 2% as Brent Crude Slips Below $106

Global oil prices retreated nearly 2% on Wednesday, surrendering part of the strong gains recorded over the previous three trading sessions as investors weighed ongoing supply disruptions in the Gulf against fragile geopolitical developments in the Middle East.

At the close of trading, futures for Brent Crude fell 1.98% to settle at $105.63 per barrel, slipping below the key $106 threshold. Meanwhile, West Texas Intermediate declined 1.14% to $101.02 per barrel.

Latest Oil Prices:

WTI Crude • 101.0 -0.02 -0.02%

Brent Crude • 105.6 -2.14 -1.99%

Murban Crude • 104.2 -1.85 -1.75%

WTI Midland • 103.2 -1.18 -1.13%

Opec Basket • 115.1 +7.43 +6.90%

Indian Basket • 2 days 109.1 +6.53 +6.37%

Natural Gas • 2.870 +0.006 +0.21%

Gasoline • 3.606 -0.013 -0.36%

Heating Oil • 3.951 -0.015 -0.39%

The pullback came after both benchmark contracts posted sharp gains during the previous session, rising 3.42% and 4.19% respectively, amid mounting concerns over continued disruptions to oil shipments from the Middle East.

Markets remain highly sensitive to developments surrounding the fragile ceasefire efforts involving Iran and ongoing tensions tied to the strategic Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas supplies typically pass.

Investor attention is also focused on the high-stakes summit in China between President Donald Trump and President Xi Jinping, as global powers seek to navigate the escalating energy and geopolitical crisis.

Trump said Tuesday that he did not believe Chinese assistance would be necessary to end the conflict with Iran, despite fading hopes for a lasting ceasefire and Tehran’s tightening control over maritime traffic in Hormuz.

The U.S. Energy Information Administration meanwhile lowered its oil price outlook for 2026. The agency now expects Brent crude to average $94.85 per barrel this year, down 1.2% from its previous estimate of $96, while forecasts for West Texas Intermediate were cut by 2% to $85.68 per barrel.

Despite the revised forecasts, spot Brent prices averaged $117 per barrel in April as substantial portions of Gulf oil exports remained disrupted.

Market analysts said persistent uncertainty surrounding supply routes continues to provide strong support for oil prices even amid short-term corrections.

Priyanka Sachdeva said concerns over supply disruptions and geopolitical instability are keeping crude markets highly reactive to developments in the region.

Analysts at Eurasia Group warned that the scale and duration of supply losses, now estimated to exceed one billion barrels, could keep oil prices above $80 per barrel for the remainder of the year.

The energy shock is also increasingly affecting the broader U.S. economy, contributing to rising fuel prices and renewed inflationary pressure. Recent U.S. data showed consumer prices accelerating for a second consecutive month in April, fueling expectations that the Federal Reserve System may keep interest rates elevated for longer.

At the same time, U.S. crude inventories continued to tighten. According to the latest weekly EIA report, American crude stockpiles fell by 4.3 million barrels during the week ending May 8, bringing total inventories down to 452.9 million barrels.

Gasoline inventories also dropped by 4.1 million barrels to 215.7 million barrels, while distillate fuel stocks, including diesel and heating oil, edged slightly higher by 0.2 million barrels.