Oil prices edged lower for a second session in a row on Wednesday after U.S. President Donald Trump reiterated that the conflict with Iran would end “very quickly”. However, markets remained cautious as uncertainty persisted over peace negotiations and ongoing disruptions to Middle East oil supplies.
Investors are closely watching whether the U.S. and Iran can genuinely reach common ground and secure a peace deal, especially as Washington’s position appears to change from day to day. Just days earlier, Trump said he’s losing patience with Iran.
Crude oil price on May 20
Brent crude futures slipped 45 cents, or 0.4%, to $110.83 a barrel, while U.S. West Texas Intermediate crude futures declined 27 cents, or 0.3%, to $103.88 a barrel. Both benchmarks had already dropped nearly $1 on Tuesday after U.S. Vice President JD Vance said Washington and Tehran had made progress in talks, adding that neither side wanted military action to resume.
Despite telling U.S. lawmakers late on Tuesday that the conflict could end quickly, Trump had earlier said the United States might still need to strike Iran again. He also revealed he had come within an hour of authorising an attack before deciding to postpone it.
Experts say that oil prices are expected to stay elevated because of the risk of renewed U.S. strikes on Iran and concerns that crude supplies may not immediately return to pre-war levels even if an agreement is reached.
Those remarks followed comments made a day earlier, when Trump said he had paused plans to resume hostilities after Tehran presented a fresh proposal aimed at ending the U.S.-Israeli war.
Speaking on Tuesday, Trump also said Iran’s leadership was “begging” for a deal and warned that fresh U.S. military action could take place within days if negotiations fail.
Analysts at Morgan Stanley said the oil market is in “a race against time,” warning that the factors keeping crude prices from rising further may fade if the Strait of Hormuz remains shut into June.
Morgan Stanley also said higher U.S. crude exports and softer Chinese imports have helped cushion the market from a deeper supply shock so far. However, the brokerage warned that a prolonged closure of Hormuz could once again tighten global supplies if disruptions continue beyond what China or the United States can absorb comfortably.
Haitong Futures said markets remain cautious and warned that the ceasefire may not hold for long. The brokerage added that stalled negotiations between Washington and Tehran could trigger another round of escalation and push oil prices even higher.
Saudi Aramco CEO Amin Nasser said earlier this month that disruptions to shipments through Hormuz could delay stability returning to oil markets until 2027, with around 100 million barrels of oil supply per week potentially affected. Aramco is the world’s largest oil-producing company.
The U.S.-Israeli conflict with Iran has effectively shut the Strait of Hormuz, a route that normally handles around one-fifth of global oil supplies. To offset supply shortages caused by the conflict, countries have increasingly turned to commercial and strategic oil reserves.
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