Previously, prices had dropped over 4 percent due to speculation about a possible ceasefire between Hezbollah and Israel. Despite this, the market remained cautious about a potential Israeli attack on Iran's oil infrastructure. Analysts at Macquarie noted that they expected further volatility as the market balanced bearish fundamentals with supply risks resulting from escalating tensions in the Middle East.

The sharp decline in prices on Tuesday followed a rally initiated by Iran's missile barrage at Israel on October 1, which led to an 8 percent increase for the week, marking the most significant rise in over a year. Additionally, Hezbollah officials seemed to retract their stance on a truce in Gaza as a prerequisite for a ceasefire in Lebanon. Naim Qassem, Hezbollah's deputy leader, expressed support for efforts to secure a truce during a televised address, notably omitting any mention of the end of the war in Gaza as a necessary condition.