GFN – LONDON: Oil prices recovered in early trading on Wednesday after a renewed exchange of strikes between the United States and Iran cast doubt on an imminent ceasefire, reversing part of the previous session’s selloff across crude benchmarks.
West Texas Intermediate had settled 3.4% lower in the prior session, closing below $90 a barrel, while Brent ended just under 3% lower, before both contracts firmed by more than 1% in early trading, analysts reported. The recovery followed the resumption of US strikes on Iran after the downing of an American helicopter in the region, an escalation that undercut weekend signals from Israel and Iran that the strikes had ended.
Iran’s forces “will leave no attack or threat unanswered,” the note relayed.
The exchange renewed questions over whether a sustainable ceasefire permitting the free flow of vessels through the Strait of Hormuz remains within reach. Participants have largely stayed on the sidelines, with aggregate open interest in ICE Brent trending to its lowest level since August 2025. The assessment identified upside to prices should the disruptions persist into the third quarter, a period of seasonally stronger demand.
Demand-side data complicated the picture, as Chinese crude imports fell 3.2 million barrels a day year on year to 7.8 million in May, the lowest since October 2017, reflecting persistent supply disruptions and leaving open the question of how far Beijing would draw down inventories.
US inventories continued to tighten, with the American Petroleum Institute estimating a 9.1 million barrel crude draw and a 1.2 million barrel decline in gasoline stocks over the past week, ahead of the more widely followed Energy Information Administration report due later in the session. The development reflects a market that remains tightly bound to geopolitical headlines as the conflict’s effect on physical flows takes precedence over positioning.
