Crude oil futures traded lower on Wednesday morning as markets assessed developments around the delicate ceasefire in West Asia and US President Donald Trump’s visit to China.
At 9.22 am on Wednesday, July Brent oil futures were at $106.59, down by 1.09 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $101.06, down by 1.10 per cent. May crude oil futures were trading at ₹9657 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹9723, down by 0.68 per cent, and June futures were trading at ₹9347 against the previous close of ₹9441, down by 1 per cent.
Trump, who will be on a visit to China this week, said he does not need China’s help to end the war with Iran. “I don’t think we need any help with Iran. We’ll win it one way or the other, peacefully or otherwise,” he told reporters in the US.
Though the ceasefire came into force in West Asia region a month ago, there is no progress on an agreement to end the war in the region.
Meanwhile, a Reuters report said that Iran has finalised deals with Iraq and Pakistan to ship oil and liquefied natural gas from the region. Quoting unnamed sources, the report said other countries are also exploring similar deals.
The latest Short-Term Energy Outlook (STEO) by the US EIA (Energy Information Administration) said that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain collectively shut in 10.5 million barrels per day of crude oil production in April. The Strait of Hormuz remains effectively closed until late May, with shipping traffic beginning to pick up in June, it said.
Oil shipments through the strait, however, will not likely reach pre-conflict levels until later this year, and we expect some oil production in West Asia to remain disrupted over that period. Disrupted production leads to large oil inventory draws, particularly in May and June, limiting downward oil price pressures even after flows through the strait rise.
“Because this month we assume both a later reopening of the Strait of Hormuz and a longer recovery period for shut-in oil production, we forecast global oil inventories will decrease by 2.6 million barrels per day this year, compared with a 0.3 million barrels per day decrease in last month’s STEO,” it said.
On the crude oil price forecast, STEO said the Brent crude oil spot price increased sharply in April, reaching a high of $138 per barrel on April 7 and averaging $117 per barrel for the month, as the de facto closure of the Strait of Hormuz tightened global oil supplies.
“We expect global oil inventories will fall by an average of 8.5 million barrels per day in the second quarter of 2026, keeping Brent prices around $106 per barrel in May and June. As oil production in the Middle East rises, we expect crude oil prices to fall, dropping to an average of $89 per barrel in the fourth quarter of 2026 and $79 per barrel in 2027,” it said.