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Economy
Oil prices fell on Wednesday as investors weighed a fragile Iran ceasefire and President Trump's summit in China.
Oil prices slipped on Wednesday, with traders closely watching a fragile ceasefire in the Iran war and President Donald Trump's departure for a high-stakes summit with Chinese President Xi Jinping. By 09:45 Moscow time, US West Texas Intermediate crude futures for June delivery had dropped 1.31% to $100.84 per barrel, while global benchmark Brent crude futures for July fell 1.29% to $106.38 per barrel, trading data showed.
Both benchmarks have hovered near or above $100 per barrel since late February 2026, when the US and Israel launched attacks on Iran and Tehran effectively closed the Strait of Hormuz. The waterway normally carries about a fifth of the world's oil and liquefied natural gas supplies.
On Tuesday, prices had surged more than 3%, extending earlier gains as hopes for a permanent ceasefire between Washington and Tehran dimmed, reducing the likelihood of the strait reopening.
Trump said Tuesday he does not believe he will need China's help to end the war with Iran, even as expectations for a lasting deal fade and Iran tightens its grip on the strait. China is the largest buyer of Iranian oil, despite pressure from the Trump administration. Trump is scheduled to meet Xi in Beijing on Thursday and Friday.
Consultancy Eurasia Group told clients in a note that "the length of the disruption and the volume of lost supply, which has already exceeded 1 billion barrels, means oil prices are likely to remain above $80 per barrel for the rest of the year."
The war with Iran is already hurting the US economy, as higher oil prices push up fuel costs. Economists expect secondary effects in the coming months. US consumer prices rose sharply in April 2026 for the second consecutive month, driving the largest annual inflation increase in nearly three years. That has reinforced expectations that the Federal Reserve will keep interest rates unchanged for a while.
Capital Economics told clients in a note: "The marked rise in inflation in advanced economies has not yet caused a contraction in real spending, but the broad-based decline in consumer confidence and hiring intentions suggests the worst is yet to come."
