WTI near $92, Brent at $98 as US-Iran tensions keep oil market on edge

Oil prices pulled back on Wednesday as traders weighed hopes for progress in US-Iran negotiations against renewed military tensions near the Strait of Hormuz.

West Texas Intermediate crude traded around $92 a barrel, while Brent crude hovered near $98.16, with investors assessing whether diplomacy could ease supply risks or whether fresh hostilities could keep geopolitical premiums elevated.

The US crude benchmark was little changed after easing in previous sessions, when signs of diplomatic movement between Washington and Tehran helped cool some of the geopolitical premium in oil prices.

Still, the downside was limited by reports of fresh US strikes on Iranian missile-launch sites and boats, which raised fresh doubts about whether a ceasefire could hold.

The market is also looking ahead to weekly US inventory figures for a clearer read on supply and demand in the world’s largest oil consumer.

Talks and strikes shape sentiment

Oil traders have been focused on whether US-Iran negotiations can lead to a more durable ceasefire and reduce risks around energy flows.

US President Donald Trump said earlier this week that talks to extend a ceasefire and reopen a key waterway were progressing.

That helped ease fears of a deeper supply shock and weighed on crude in prior trading.

However, sentiment remained fragile after renewed exchanges between the two sides.

Security around the Strait of Hormuz, a key route for global energy shipments, remained uncertain following the latest strikes.

US Central Command also pushed back against reports suggesting the military was helping escort vessels through the area, keeping attention on shipping risks and the potential for further disruption.

Iran has signalled it could respond if tensions flare again. The Iranian military said on Tuesday that it reserved the “legitimate and definite” right to retaliate against any ceasefire violations by the US.

Inventory data in focus

The next catalyst for oil markets may come from the American Petroleum Institute’s weekly stockpile report, due later on Wednesday.

A larger-than-expected draw in crude inventories would suggest stronger demand or tighter supply, potentially supporting prices.

A build, by contrast, could point to softer demand or excess supply and weigh on the market.

The API report usually comes a day before the US Energy Information Administration releases its official inventory data.

Traders often use the private report as an early signal, though the government figures are typically viewed as more authoritative.

Inventory numbers are especially important when geopolitical risks are elevated, as they help investors assess whether supply concerns are being matched by underlying demand.

Geopolitics keeps oil volatile

WTI prices are sensitive to both physical supply conditions and broader risk sentiment.

The benchmark reflects US crude delivered at Cushing, Oklahoma, a key storage and pipeline hub.

But its price is still shaped by global demand, OPEC+ supply decisions, sanctions, wars and currency moves.

Because oil is largely traded in dollars, changes in the US currency can also influence affordability for buyers using other currencies.

For now, crude remains caught between competing forces. Diplomacy between Washington and Tehran could ease supply fears and cap prices.

Further military escalation, particularly near the Strait of Hormuz, could quickly revive concerns about disruption and push WTI higher.

Near-term price action is likely to depend on whether ceasefire talks show real progress, whether regional security risks intensify and whether US inventory data points to tightening or weakening demand.