Global oil prices eased on Wednesday after three consecutive sessions of gains, as traders weighed persistent geopolitical tensions in the Middle East against uncertainty surrounding diplomatic developments involving the United States, China, and Iran.
According to market data reported by Reuters, Brent crude futures fell by 1.4 per cent to $106.30 per barrel at around 12:30 pm Bangladesh time on 13 May. Meanwhile, US West Texas Intermediate (WTI) crude declined by the same margin, dropping to $100.77 per barrel.
The latest decline follows a strong rally earlier in the week, when oil prices surged more than 3 per cent amid renewed concerns over supply disruptions linked to the Iran conflict. Since late February, when military strikes involving the United States and Israel targeted Iran and Tehran subsequently tightened control over the Strait of Hormuz, crude prices have largely remained above the psychologically significant $100-per-barrel threshold.
The Strait of Hormuz remains central to market anxiety, as roughly one-fifth of global oil and liquefied natural gas shipments typically pass through the narrow waterway. Any disruption or operational restrictions in the channel can rapidly tighten global energy supplies and trigger price spikes.
Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, said the oil market continues to be supported by fears of supply disruptions and persistent uncertainty in the Middle East.
She noted that investors remain highly reactive to every development in the region, resulting in pronounced price volatility. According to her assessment, any further escalation or fresh threat to supply routes could quickly reverse Wednesday’s decline and push both Brent and WTI prices higher again.
On the diplomatic front, US President Donald Trump stated on Tuesday that he does not believe China’s assistance is necessary to end the Iran conflict. However, with prospects for a durable ceasefire weakening and Tehran maintaining tighter oversight of Hormuz, investors remain cautious.
China continues to be Iran’s largest oil customer despite US sanctions, making upcoming discussions between Trump and Chinese President Xi Jinping in Beijing later this week particularly significant for energy traders.
Research firm Eurasia Group said in a recent analysis that oil prices are likely to remain above $80 per barrel for the rest of the year, citing prolonged supply constraints and an estimated deficit of more than 1 billion barrels.
Higher energy prices are also beginning to affect the US economy. Rising fuel costs have contributed to stronger inflationary pressures, with US consumer prices reportedly increasing for a second straight month in April, signalling the highest annual inflation pace in nearly three years.
This has reinforced market expectations that the US Federal Reserve may keep interest rates unchanged for a longer period. Higher borrowing costs can weaken economic activity and eventually dampen oil demand by discouraging business investment and household spending.
Meanwhile, supply fundamentals remain supportive. Industry sources citing data from the American Petroleum Institute said US crude inventories declined for a fourth consecutive week, while diesel and other refined fuel stockpiles also posted declines.
| Key Oil Market Indicators | Latest Level | Daily Change |
|---|---|---|
| Brent Crude | $106.30/barrel | -1.4% |
| WTI Crude | $100.77/barrel | -1.4% |
| Previous Day Oil Rise | — | +3%+ |
| Global Oil & LNG via Hormuz | ~20% | Critical route |
Despite Wednesday’s pullback, analysts broadly expect oil markets to remain volatile as geopolitical risks, supply constraints, and macroeconomic pressures continue to shape global energy pricing.