Oil Prices Slide as US Shifts Strategy on Iran, Economic Pressure Takes Center Stage

Oil prices fell on Wednesday as Washington's shift from military strikes to economic pressure on Iran eased immediate supply fears.

The US plans to intensify economic pressure through a naval blockade and tighter sanctions, while seeking to facilitate Iranian oil flows into global markets via the Strait of Hormuz.

An agreement between Iran and Oman to establish a temporary transit route through the strait further pressured prices by easing market players' supply concerns.

US inflation concerns are also weighing on oil prices by keeping expectations of another Federal Reserve rate hike alive, while data pointing to a rise in US crude inventories adds to bearish sentiment.