Oil retreated on US military pullback hopes despite Qatari tanker strike

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