Oil Prices Drop as US-Iran Standoff Eases War Fears

Crude oil futures fell for a third straight session on Wednesday, as traders grew more confident that the United States will use economic pressure—not military force—to reopen the Strait of Hormuz. The shift in sentiment comes after weeks of tension in the key shipping lane, through which nearly a fifth of the world’s oil passes. Investors now bet that Washington’s strategy of isolating Iran financially will push Tehran back to the negotiating table, avoiding a direct conflict that could disrupt global supplies. Prices swung in choppy trading, reflecting uncertainty over how quickly diplomacy might work. Still, the market’s cautious optimism weighed on benchmarks, with both Brent and West Texas Intermediate closing lower. Analysts say the next move depends on whether Iran responds to the economic squeeze with concessions or further provocation. For now, the oil market is pricing in a path that avoids a full-blown closure of the strait.