Oil Falls on U.S.-Iran Ceasefire Uncertainty; Brent at $106.95

International oil prices fell amid uncertainty over a U.S.-Iran ceasefire.

Reuters reported on May 12 that Brent crude futures fell 0.76% from the previous session to $106.95 a barrel. West Texas Intermediate futures also slipped 0.65% to $101.52.

The market appeared to pause after three straight sessions of gains as investors locked in profits and turned cautious.

Middle East risks, however, continue to underpin prices. Since the U.S. and Israel attacked Iran in late February, Iran has effectively tightened control over the Strait of Hormuz, helping keep oil trading around $100 a barrel for an extended period.

Oil had jumped more than 3% a day earlier as hopes for a U.S.-Iran ceasefire faded, reducing the likelihood of normalized traffic through the Strait of Hormuz. The waterway is a critical shipping route that handles about 20% of global crude oil and liquefied natural gas supplies.

The surge in oil prices is also weighing on the U.S. economy. The April consumer price index posted its biggest increase since 2023, adding to expectations that the Federal Reserve will keep interest rates elevated for the time being.

Market participants are also watching this week's summit between the U.S. and China for clues on the oil market's direction, given that China is the largest importer of Iranian crude.

Trump said on May 12 that China's help was not needed to resolve the war with Iran, reaffirming a U.S.-led pressure campaign rather than indirect talks through Beijing.

Trump is set to meet Chinese President Xi Jinping in Beijing on May 14 and 15.