WASHINGTON (dpa-AFX) - Crude oil prices have gone into freefall on Wednesday, extending yesterday's losses, as diplomatic measures to secure a U.S.-Iran agreement to end their hostilities move at a brisk pace.
WTI Crude Oil for July month delivery was last seen trading down by $5.89 (or 5.66%) at $98.26 per barrel.
The U.S.-Iran war entered day number 82 today, leaving the Strait of Hormuz effectively closed. A third of the world's fertilizer supply passing through the strait has halted and the U.N. Food and Agriculture Organization warned that this could trigger a severe global food price crisis.
Over the past few days, U.S. President Donald Trump had been oscillating on the U.S.-Iran crisis from allowing negotiations on the one hand and warning of military strikes on the other. Consequently, investors stayed away from big moves.
Last week, while returning from a two-day summit in China, Trump stated that he ordered the ceasefire in early April only at the request of Pakistan and other Arab nations though he did not favor it personally.
After stepping up pressure on Iran to force the regime to make a deal through a series of posts via Truth Social, on Sunday, Trump urged Iran to act fast and warned if they fail to do so, nothing will be left of the country.
As concerns of escalation grew larger, Iran's Tasnim news agency reported on Monday that Iran had offered a 14-point proposal through Pakistan to the U.S. aimed to end the war.
While the U.S. administration reviewed the draft, Trump announced that he had called off a planned large-scale attack on Iran for yesterday at the request of leaders from the Gulf. However, he reaffirmed that forces are in waiting to resume a massive attack on Iran if a settlement is not reached soon.
Hours after halting the attacks, Trump announced that Iran should be given a big hit and insisted Iran cannot be allowed to have a nuclear weapon.
Claiming he was only an hour away from ordering potential strikes before pausing the offensive, Trump added that now offered Iran only a limited period of time for a settlement failing which the U.S. strikes could recommence.
In response, Iranian Foreign Minister stated that Iran will throw surprises. Iran's Islamic Revolutionary Guards Corps threatened that if a war breaks out again, it could extend beyond the Middle East.
Today, Trump stated that he was in no hurry to reach a deal but also asserted that the conflict is in the 'final stages.'
'We'll see what happens,' Trump told reporters. 'We'll either have a deal or we're going to do some things that are a little bit nasty, but hopefully that won't happen.'
Speaking of ally Israel, Trump claimed that Israeli Prime Minister Benjamin Netanyahu will do whatever he wants him to do on Iran.
Pakistan's Interior Minister Mohsin Naqvi has arrived in Iran for the second time in less than a week. Iran is currently reviewing a new U.S. proposal, and Naqvi is facilitating the exchange of messages.
U.S. Vice President JD Vance affirmed at a White House briefing that the talks between both the nations have been progressing well.
On the inventory front, data from the American Petroleum Institute revealed that U.S. crude oil inventories fell by 9,100,000 barrels for the week ending May 15, exceeding expectations for a 3,400,000-barrel draw and following a 2,190,000-barrel decline in the previous week.
According to the U.S. Energy Information Administration, for the week ending May 15, crude oil inventories in the U.S. decreased by 7,860,000 barrels.
For the same period, gasoline inventories decreased by 1,548,000 barrels, distillate inventories increased by 372,000 barrels, and heating oil inventories increased by 21,000 barrels.
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