Global oil prices dropped sharply on Wednesday, with benchmarks falling nearly 4% amid growing expectations that a potential ceasefire in the Middle East could ease supply disruptions.
Futures for Brent crude oil fell by $4.89, or 4.7%, to $99.60 per barrel as of 03:35 GMT, after earlier slipping to an intraday low of $97.57. Meanwhile, West Texas Intermediate crude declined by $3.54, or 3.8%, to $88.81 per barrel, having touched $86.72 earlier in the session.
Latest Oil Prices:
WTI Crude $90.05 -2.30 -2.49%
Brent Crude $101.5 -3.04 -2.91%
Murban Crude $100.3 -19.62 -16.37%
Heating Oil $3.984 -0.307 -7.15%
WTI Midland $93.58 -1.51 -1.59%
Natural Gas $2.951 +0.008 +0.27%
Gasoline $3.004 -0.144 -4.57%
Opec Basket $145.2 +2.38 +1.67%
Indian Basket $157.0 +7.11 +4.74%
The decline follows reports suggesting diplomatic progress between United States and Iran, including a proposed 15-point plan aimed at ending ongoing hostilities. Market sentiment was further supported by speculation over a temporary truce that could stabilize energy flows.
The downturn comes after both benchmarks surged nearly 5% on Tuesday, only to reverse course in volatile trading as profit-taking set in following settlement.
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, noted that while expectations of a ceasefire have slightly increased, uncertainty remains high.
“Profit-taking is currently driving the market, but the outlook for a successful agreement is still unclear, limiting further selling,” he said.
On Tuesday, Donald Trump stated that Washington is making progress in negotiations to end the conflict with Iran. A source confirmed that the United States had presented a comprehensive settlement proposal.
According to regional media reports, the plan includes a one-month ceasefire, discussions over dismantling Iran’s nuclear program, halting support for allied groups, and reopening the strategically critical Strait of Hormuz.
Despite optimism, analysts remain cautious about the prospects for a lasting agreement. Priyanka Sachdeva, senior market analyst at Phillip Nova, said developments in the Middle East will continue to be the primary driver of oil prices.
She added that crude is likely to trade within a wide range in the near term due to ongoing geopolitical uncertainty.
The conflict has severely disrupted oil and liquefied natural gas shipments through the Strait of Hormuz, a key chokepoint through which roughly 20% of global oil and gas supply passes.
The International Energy Agency described the situation as one of the most significant supply disruptions on record.
Saul Kavonic, head of energy research at MST Marquee, warned that even if a ceasefire is reached, a full recovery in production and flows remains uncertain without guarantees of sustained stability.
In parallel diplomatic efforts, Pakistan has offered to host talks between Washington and Tehran. Iran, for its part, informed the United Nations and maritime authorities that “non-hostile” vessels may pass through the Strait of Hormuz, subject to coordination.
However, military activity continues, with ongoing strikes involving the United States, Israel, and Iran. Reports also point that Washington is preparing to deploy additional forces to the region.
To offset disruptions, Saudi Arabia has increased oil exports from its Red Sea port of Yanbu Port to around 4 million barrels per day last week, according to shipping data.
In the United States, crude and fuel inventories also rose, according to market sources citing data from the American Petroleum Institute. Crude stocks increased by 2.35 million barrels in the week ending March 20, while gasoline and distillate inventories rose by 528,000 and 1.39 million barrels, respectively.
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