Published on 5/20/2026
Oil prices fell on Wednesday after US President Donald Trump’s renewed statements regarding the imminent end of the war with Iran, at a time when markets remained cautious about the continued disruptions in energy supplies in the Middle East and its repercussions on the global economy.
Brent crude futures fell 75 cents, or 0.68%, to $110.23 a barrel, while US West Texas Intermediate crude fell 94 cents, or 0.9%, to $103.08 in early trading.
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The two benchmarks lost about a dollar yesterday, Tuesday, after statements by US Vice President J.D. Vance, in which he said that Washington and Tehran had made progress in the talks, and that both parties did not want to resume military action.
Toshitaka Tazawa, an analyst at Fujitomi Securities, said: “Investors are keen to evaluate whether Washington and Tehran can actually reach a formula of understanding and conclude a peace agreement, with the position of the United States changing daily.”
He added, “Oil prices are likely to remain high given the possibility of renewed US attacks on Iran and expectations that crude oil supplies will not quickly return to pre-war levels, even if a peace agreement is reached.”
Although Trump assured American lawmakers that the conflict “will end quickly,” he at the same time hinted at the possibility of launching new attacks on Iran if the negotiations faltered.
The US-Israeli war on Iran caused an almost complete closure of the Strait of Hormuz, through which about 20% of global oil supplies pass, leading to the largest disruption in the supply market, according to the International Energy Agency.
In this context, Citibank expected Brent crude oil to rise to $120 per barrel in the near term, indicating that the markets do not fully reflect the risks of supply disruption for long periods.
In the United States, data from the American Petroleum Institute showed a decline in crude oil inventories for the fifth week in a row, in addition to a decline in fuel inventories.
Gold decline
The repercussions of the rise in yields and the dollar extended to the precious metals markets, as gold declined with the rise in US Treasury bond yields and the dollar, which limited the appeal of the yellow metal as a safe haven.
Gold in spot transactions fell 0.35% to $4,466.12 per ounce, while US gold futures fell 0.9% to $4,471.10.
Tim Waterer, chief market analyst at KCM Trade, said, “Gold is losing momentum to some extent in light of rising yields, and the dollar, which is witnessing a recovery as market bets on raising interest rates escalate.”
For other precious metals:
- Silver in spot transactions fell 0.8% to $73.22 per ounce.
- Platinum fell 0.5% to $1,912.67.
- Palladium rose 0.2% to $1,356.32.
Dollar stability
The dollar stabilized near its highest level in 6 weeks, as investor bets escalated on the possibility of the Federal Reserve raising interest rates to combat inflation resulting from the war and rising energy prices.
The yield on 30-year US Treasury bonds reached the highest level since 2007, at a time when inflationary fears prompted investors to sell bonds globally.
The dollar index also rose to the level of 99.306, supported by market expectations that the US Central Bank will begin a monetary tightening cycle by the end of the year.
In the currency market, the Japanese yen returned to levels close to 160 yen against the dollar, a level that had previously prompted the Japanese authorities to intervene in the exchange market during the past weeks to support the local currency.
