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EMEA Oil Update: Oil Drops Over 3% Following Trump's Remarks

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Oil futures dipped more than 3% on Wednesday after US President Donald Trump reportedly said that the war with Iran would end very quickly, temporarily easing geopolitical anxieties despite persistent disruptions to Middle Eastern supplies.

Front-month Murban crude futures fell 3.1% to $104 per barrel, while Brent futures were down 3% to $107.91/bbl.

"The situation in Hormuz is still deadlocked and Trump last night made new threats to attack Iran. If the strait remains closed into June, there is a risk that the oil shortage becomes acute in parts of the world, which could send the oil price significantly higher than today," SEB analysts said.

According to Saxo Bank, crude continues to trade with an aggressive risk premium driven by the ongoing realities of the conflict.

Analysts noted that if the vital chokepoint remains restricted into June, the localized supply crunches currently hitting downstream markets are expected to transition into severe global oil shortages, potentially triggering a significant, secondary price spike.

This structural anxiety was underscored by recent data from the Oxford Institute for Energy Studies, which confirmed a massive restructuring of risk-taking across derivatives markets.

Due to the high volatility and unpredictable physical disruptions in the Middle East, commercial traders are noticeably retreating from standard Brent futures, fundamentally altering liquidity across global oil benchmarks, OIES noted.

Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories dropped by 9.1 million barrels in the week ended May 15.

The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.

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