Global crude oil prices fell nearly 1 per cent for a second straight session on Wednesday, 20 May, after US President Donald Trump reiterated that the conflict with Iran could end 'very quickly', stoking hopes of a diplomatic resolution in West Asia. The back-to-back decline signals that markets are beginning to price in the possibility of a peace deal, even as uncertainty lingers.

How Markets Moved

International benchmark Brent crude futures slipped 0.9 per cent, or nearly $1, to settle at $110.28 per barrel. US West Texas Intermediate (WTI) crude futures fell approximately 1 per cent, or $1.03, to $103.12 per barrel. Both benchmarks had already shed close to $1 in the previous session following early signs of progress in Washington–Tehran talks.

What Trump Said

Speaking at the annual Congressional Picnic, Trump said the conflict with Iran would be resolved 'very quickly' and that Tehran wanted 'to make a deal so badly'. He also forecast a sharp drop in global crude prices, attributing it to abundant supply. 'There's so much oil out there, prices are going to fall sharply,' Trump said, adding that Iran was eager to strike an agreement with Washington.

Analyst Divergence

Market analysts remain divided on the near-term trajectory. Experts cited by reports noted that the bias in oil prices remains cautiously bullish given ongoing West Asia developments. Global brokerage Citigroup, however, expects Brent to climb to $120 per barrel in the near term — a view that stands in sharp contrast to Trump's supply-abundance argument.

Morgan Stanley described the oil market as being in 'a race against time', warning that factors currently capping price gains could unravel if the Strait of Hormuz remains shut into June. The brokerage noted that higher US crude exports and softer Chinese imports have so far cushioned the market from a deeper supply shock.

Key Risk: The Strait of Hormuz

The Strait of Hormuz — through which roughly 20 per cent of global oil supply transits — remains a critical chokepoint. Any prolonged closure would rapidly tighten global supply, potentially reversing the recent price softness. Investors are closely watching whether Washington and Tehran can secure a durable agreement, particularly as the US stance has appeared inconsistent in recent days, according to reports.

What to Watch Next

Progress — or breakdown — in US–Iran negotiations will be the primary price driver in the sessions ahead. A confirmed diplomatic deal could push Brent meaningfully below current levels, while a collapse in talks risks a sharp reversal toward the $120 target flagged by Citigroup. The next few weeks are likely to be decisive for global energy markets.