Global oil prices dropped sharply on Wednesday, falling around 4% as optimism grew over a potential ceasefire in the Middle East that could ease ongoing supply disruptions.
Brent crude declined by $4.89, or 4.7%, to $99.60 per barrel, after touching an intraday low of $97.57. Meanwhile, US West Texas Intermediate (WTI) crude fell $3.54, or 3.8%, to $88.81 per barrel, having earlier dipped to $86.72. The decline follows a nearly 5% surge in both benchmarks a day earlier, highlighting continued market volatility.
Market sentiment shifted after reports that the United States shared a 15-point proposal with Iran aimed at ending the conflict. The plan reportedly includes a temporary ceasefire, discussions on Iran’s nuclear programme, and the reopening of the Strait of Hormuz—a critical global energy transit route.
Analysts say easing geopolitical tensions could improve supply flows, though uncertainty remains over the success and durability of negotiations. Ongoing military activity in the region continues to weigh on market confidence.
The disruption in shipments through the Strait of Hormuz—responsible for transporting nearly one-fifth of global oil and gas—has been described as one of the most significant supply shocks in history. While Saudi Arabia has increased exports via its Red Sea Yanbu port to offset losses, concerns persist over tight market conditions.
Adding to pressure on prices, US crude inventories rose by 2.35 million barrels last week, alongside increases in gasoline and distillate stocks, signaling softer demand.
Experts warn that despite short-term price declines, Middle East developments will remain the key driver of oil market volatility in the coming weeks.
By Reuters
