Crude Oil Falls $4.57 As Geopolitical Risk Fades From Focus, Earnings Beat Sentiment

2 min readMay 6, 2026 01:12 PM IST

Oil prices fell for a second straight day on Wednesday as expectations grew that supply from the Middle East could resume, after US President Donald Trump signalled progress toward a possible peace deal with Iran.

Brent crude for July delivery dropped $1.52, or 1.38%, to $108.35 per barrel as of 0103 GMT, after falling 4% in the previous session. US West Texas Intermediate (WTI) for June declined $1.50, or 1.47%, to $100.77, following a 3.9% drop a day earlier, Geo News reported.

The decline came after Trump said he would briefly pause ‘Project Freedom’, an operation to escort ships through the Strait of Hormuz, citing progress toward a broader agreement with Iran. There was no immediate response from Tehran.

Despite the pause, Trump said the US Navy would maintain its blockade of Iranian ports. “We have mutually agreed that, while the blockade will remain in full force, Project Freedom will be paused briefly to see if an agreement can be finalised,” Trump said in a social media post.

The announcement came hours after US Secretary of State Marco Rubio outlined efforts to escort stranded tankers through the strait. Earlier, the US military said it had destroyed several Iranian boats, cruise missiles and drones while guiding vessels through the Gulf.

Supply disruptions in the region had tightened global markets, drawing down inventories as refineries scrambled to meet demand. US crude stocks fell for a third consecutive week, alongside declines in gasoline and distillate inventories, according to data cited from the American Petroleum Institute.

Crude inventories dropped by 8.1 million barrels in the week ended May 1, while gasoline stocks fell by 6.1 million barrels and distillates by 4.6 million barrels.

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Overall, easing geopolitical tensions have shifted market sentiment, with traders increasingly focusing on fundamentals even as risks in the region persist.

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