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Global crude futures fell on Wednesday amid rising market speculation that the US may scale back military operations in Iran.

Brent crude dropped 2.7% to settle at $101.16 a barrel, while US WTI declined 1.24% to $100.12. The selloff was triggered by remarks from the US President suggesting operations could conclude within weeks, spurring algorithm-driven flows to price in a potential de-escalation ahead of a planned national address.

Despite the futures-driven drop, physical supply remains tightly constrained. Analysts warn that a unilateral US exit without formal guarantees for free maritime passage would leave a structural risk premium intact.

The fragility of the region’s infrastructure was highlighted when an Iranian cruise missile struck a QatarEnergy-leased tanker in Qatari waters, underscoring ongoing operational threats.

The International Energy Agency also noted that the temporary relief from pre-war contracted cargoes has largely vanished. With the Strait of Hormuz still effectively blocked, the shortfall of Middle Eastern crude is expected to have a lasting impact on European supply chains from this month, leaving the market caught between speculative optimism and a persistent physical deficit.

Written by: Aiman Haikal