Oil prices plunged more than 5% Wednesday amid growing hopes of a ceasefire in the Middle East, easing fears of prolonged energy supply disruptions. Brent crude fell to $98.28 a barrel, while U.S. West Texas Intermediate dropped to $87.68.
The decline follows reports that the U.S. sent Iran a 15-point peace proposal, including demands to dismantle its nuclear program and reopen the Strait of Hormuz. President Donald Trump confirmed progress in negotiations, while Pakistan’s prime minister offered to host talks.
Despite the diplomatic movement, Iran denied formal talks and regional strikes continue. The Strait remains strategically fragile-its closure has already caused the largest oil supply disruption in history, halting most shipments through the key waterway.
Saudi Arabia has boosted exports from its Red Sea port of Yanbu to nearly 4 million barrels per day to offset losses. Analysts warn prices could rebound sharply if hostilities resume or target energy infrastructure.