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Oil prices settled higher on Wednesday before abruptly reversing gains in post-settlement trade, as de-escalating rhetoric from Washington tempered the geopolitical risk premium that has underpinned the market’s recent rally. The shift came after US President Donald Trump indicated that the intensity of the internal crackdown in Iran appeared to be subsiding, easing immediate fears of a US military intervention.

Brent futures fell 92 cents, or 1.41%, to $64.55 per barrel in late-afternoon trading, having earlier settled at $66.52.

WTI crude slipped 96 cents, or 1.57%, to $60.19, retracing from a settlement high of $62.02.

The reversal followed comments from US President Donald Trump suggesting that tensions in Iran appeared to be easing, reducing concerns that US military action was imminent. Earlier in the session, oil benchmarks had risen more than 1.5% on fears of retaliatory strikes, but those gains evaporated as traders scaled back long positions.

Prices were further pressured by bearish US inventory data. EIA figures showed crude stocks rose by 3.4 million barrels last week to 422.4 million barrels, against expectations for a draw, while gasoline inventories surged by 9 million barrels amid higher refinery runs and imports.

The upside was also capped by developments in South America. Sources confirmed that Venezuela has begun reversing production cuts, with two supertankers—carrying roughly 1.8 million barrels each—departing for the US. This marks the initial phase of a 50-million-barrel supply deal following recent political transitions in Caracas, signalling a significant return of heavy crude to the Western Hemisphere.

Written by: Aiman Haikal