FX.co ★ Oil Swings amid Iran-Israel Conflict

West Texas Intermediate (WTI) crude oil futures experienced a decline of over 1%, settling at $73.70 per barrel on Wednesday, following an earlier surge to $76. The downward shift came as President Trump suggested the possibility of initiating talks with Iran, alleviating concerns over an impending conflict. Although tensions persist due to ongoing Iran-Israel hostilities, President Trump refrained from confirming any plans for a US military strike, mentioning instead that Iran had expressed interest in dialogue, albeit belatedly. This change in rhetoric tempered the initial price increases, which had been fueled by fears of potential supply interruptions, particularly through the Strait of Hormuz, a critical passage for nearly one-third of the world's maritime oil transport. Despite the softer prices, the risk level remains heightened, with Iran threatening retaliation if the US involves itself in Israel’s military engagements. In related news, US crude oil inventories saw a significant decrease, dropping by 11.5 million barrels to 420.9 million last week, greatly surpassing expectations.