Oil prices pulled back from recent highs on Wednesday, erasing some of the previous day’s 4% gain as traders sought clarity on complex negotiations between Iran and the U.S. after renewed hostilities set back efforts to reopen the Strait of Hormuz.
Brent crude futures fell $1.42, or 1.43%, to $98.16 a barrel as of 0253 GMT, while U.S. West Texas Intermediate (WTI) crude lost $1.66, or 1.77%, to $92.23 a barrel.
Oil surged on Tuesday after the U.S. military carried out new strikes in Iran, hurting hopes over the weekend that the United States and Iran would reach an agreement to end the war.
Iran said on Tuesday the United States had violated a ceasefire by striking targets near the contested Strait of Hormuz, while the U.S. said its strikes were defensive in nature.
Following an April ceasefire in the three-month-long conflict, both sides indicated they had made progress on talks toward reopening the Strait, a key conduit for global oil and gas flows. But rising hostilities now threaten those negotiations.
Israel ramped up bombing in Lebanon on Tuesday, further straining peace efforts.
Nevertheless, the news that some LNG tankers have passed through the strait in recent days lifted expectations that the waterway might reopen soon, which would add to global supply.
