Oil prices moved lower on Wednesday, giving back part of the sharp gains recorded in the previous session as investors monitored developments in negotiations between the United States and Iran following renewed military tensions that complicated efforts to reopen the Strait of Hormuz.
Brent crude futures declined by $1.52, or 1.53%, to $98.06 per barrel by 06:33 GMT. U.S. West Texas Intermediate (WTI) crude also weakened, falling $1.90, or 2.02%, to $91.99 a barrel.
Crude prices had surged on Tuesday after the U.S. military launched fresh strikes inside Iran, undermining optimism that had emerged over the weekend regarding a possible agreement between Washington and Tehran aimed at ending the conflict.
Iran accused the United States on Tuesday of breaching the ceasefire by targeting areas near the disputed Strait of Hormuz, while U.S. officials maintained that the military actions were defensive.
At the same time, Israel intensified its bombing campaign in Lebanon on Tuesday, adding further pressure to already fragile diplomatic efforts in the region.
Following the ceasefire reached in April after three months of conflict, both Iran and the United States had signaled progress in discussions focused on reopening the Strait of Hormuz, a strategically vital route for global oil and gas shipments. However, the recent escalation in hostilities has raised doubts over the future of those negotiations.
Even so, reports that several LNG tankers have successfully crossed the strait in recent days boosted hopes that the waterway could reopen in the near term, potentially increasing global energy supplies.