Oil prices extend losses on Wednesday

Oil prices extended losses for a second day on Wednesday as expectations of renewed US–Iran peace talks eased supply concerns tied to disruptions in the Strait of Hormuz.

Brent crude fell 0.2 per cent to $94.63 a barrel after dropping 4.6 per cent in the previous session, while US West Texas Intermediate declined 0.8 per cent to $90.58 following a 7.9 per cent slide.

The decline comes as markets respond more to diplomatic signals than battlefield developments, with potential talks between the United States and Iran raising expectations that constrained supply from the region could eventually return.

The conflict has largely shut the Strait of Hormuz, sharply reducing vessel traffic to a fraction of pre-war levels, while a US blockade on Iranian shipping has halted seaborne trade. Despite a two-week ceasefire, transit through the waterway remains uncertain.

Refiners are seeking alternative supplies, pushing premiums higher for crude from regions including the US Gulf Coast and the North Sea, with WTI Midland cargoes to Rotterdam hitting a record premium.

Meanwhile, the market faces tighter supply risks after the US moved not to renew sanctions waivers on Iranian and Russian oil, while preliminary data showed US crude inventories rising for a third consecutive week.

Attribution: Reuters