SINGAPORE: Oil prices edged lower on Wednesday after recent gains, as investors monitored shifting geopolitical tensions between Iran and the United States and assessed the fragile outlook for energy flows through the Strait of Hormuz.
Brent crude futures fell $1.42, or 1.43%, to $98.16 a barrel at 0253 GMT, while U.S. West Texas Intermediate (WTI) crude declined $1.66, or 1.77%, to $92.23 a barrel.
The pullback followed a sharp rally in the previous session after renewed U.S. military strikes in Iran reignited concerns over regional supply stability and briefly lifted crude prices by around 4%.
Market sentiment remained fragile as Iran accused the United States of violating a ceasefire by targeting areas near the strategic Strait of Hormuz, a key transit route for global oil shipments. Washington maintained that its actions were defensive.
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The developments have added uncertainty to already sensitive negotiations aimed at easing tensions and restoring stability in the region, with traders closely watching any progress on reopening the Strait.
While diplomatic discussions had previously shown signs of progress toward reducing hostilities, renewed clashes have overshadowed expectations of a near-term breakthrough.
Elsewhere in the region, intensified Israeli air operations in Brent crudefurther contributed to concerns over widening instability in the Middle East.
However, some support for sentiment came from reports that several liquefied natural gas (LNG) tankers have recently passed through the Strait of Hormuz, raising cautious optimism about partial improvements in maritime traffic.
