Brent crude fell 0.69 percent to $107.03 a barrel on Wednesday, breaking a three-session rally, as traders locked in partial gains even as the near-closure of the Strait of Hormuz continued to hold global supply under historically unprecedented pressure.
The pullback is modest against a backdrop the International Energy Agency (IEA) has described as the largest supply disruption in the history of the global oil market. Daily crude flows through the strait, a corridor responsible for roughly 20 percent of the world’s oil trade, remain far below pre-war levels following the outbreak of the United States and Iran conflict earlier this year.
Saudi Aramco Chief Executive Officer (CEO) Amin Nasser warned that “the market is losing roughly 100 million barrels of supply each week,” and said prolonged disruptions could push any meaningful price normalisation into 2027.
Diplomatic efforts to reopen the waterway have stalled repeatedly. Washington this week dismissed Tehran’s latest peace response, and a proposed 14 point memorandum that would have established a ceasefire framework remains unsigned. United States President Donald Trump described the existing truce as being on “massive life support,” raising the prospect of a return to active military operations.
Despite Wednesday’s decline, Brent crude is approximately 12.91 percent above its level one month ago and nearly 61.94 percent higher year on year, a trajectory that reflects a market still pricing conflict risk rather than demand fundamentals. Analysts expect prices to remain highly reactive to any fresh signals from ongoing talks, with sharp moves possible in either direction.
A planned summit between Trump and Chinese President Xi Jinping is drawing some attention, but energy traders say developments from the Gulf remain the primary driver of price direction. Elevated energy costs are simultaneously feeding into broader inflation, with United States consumer prices accelerating to 3.8 percent in April, the highest reading since May 2023.
For Ghana, Brent trading at more than $30 above the government’s 2026 budget benchmark of approximately $76 per barrel prolongs fiscal pressure the administration has been absorbing through temporary pump price subsidies since April.
