Oil prices fell by more than 5% on Wednesday amid expectations of a potential ceasefire that could ease supply disruptions from the key oil-producing Middle East region. The decline follows reports that the United States has sent Iran a 15-point plan aimed at ending the war between them.
Brent crude futures dropped by $6.21, or 5.9%, to $98.28 per barrel as of 00:58 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell by $4.67, or 5.1%, to $87.68 per barrel.
Both benchmarks had risen by around 5% on Tuesday before giving up gains in volatile post-settlement trading.
Hiroyuki Kikukawa, chief analyst at Nissan Securities Investment, said that expectations of a ceasefire have slightly increased, prompting profit-taking in the market.
“However, uncertainty remains over the success of the negotiations, which is limiting selling pressure,” he added.
He noted that oil prices could rise again if fighting resumes and Iranian attacks extend to energy facilities in neighboring countries.
U.S. President Donald Trump said on Tuesday that Washington is making progress in efforts to negotiate an end to the war with Iran, while a source confirmed that the United States had sent a 15-point settlement proposal to Tehran.
Israel’s Channel 12 reported that the United States is seeking a one-month ceasefire to discuss the plan, which includes dismantling Iran’s nuclear program, halting support for allied groups, and reopening the Strait of Hormuz.
Pakistan’s Prime Minister Shehbaz Sharif said yesterday he is ready to host talks between the United States and Iran to end the ongoing war.
However, Iran denied on Monday that it is engaged in negotiations with the United States.
A memorandum on Tuesday indicated that Iran had informed the UN Security Council and the International Maritime Organization that “non-hostile vessels” may pass through the Strait of Hormuz, provided coordination is made with Iranian authorities.
