Global crude prices retreated sharply on Wednesday, easing below the $100 mark as hopes of a diplomatic breakthrough in the Middle East conflict tempered fears of prolonged supply disruptions.
The ongoing crisis, now in its fourth week, has kept energy markets on edge. However, fresh signals of possible negotiations between the United States and Iran triggered a wave of selling, with prices falling more than 5% and reversing gains from the previous session.
By 0058 GMT, Brent crude futures had dropped $6.21, or 5.9%, to $98.28 a barrel, after touching an intraday low of $97.57. US West Texas Intermediate (WTI) crude fell $4.67, or 5.1%, to $87.68, having earlier slipped to $86.72.
The decline followed reports that Washington had put forward a 15-point proposal aimed at ending the conflict. US President Donald Trump said the two sides were “currently in negotiations” and suggested that a deal could significantly push oil prices lower, even as Tehran denied engaging in direct talks.
Markets reacted swiftly to the prospect of de-escalation, with traders booking profits after a sharp rally earlier in the week. Both Brent and WTI had surged nearly 5% on Tuesday before turning volatile in post-settlement trade.
Despite the pullback in crude, retail fuel prices remain elevated. Petrol prices in the US have climbed to an average of $3.98 per gallon — up 34% since the conflict began — while diesel has surged even faster to $5.35 per gallon, marking a 42% increase.
Analysts say the market is now caught between cautious optimism and lingering uncertainty. While ceasefire hopes have eased immediate pressure, the absence of a confirmed agreement is preventing a deeper correction in prices.
A key concern continues to be the Strait of Hormuz, a critical artery for global energy supplies that handles nearly one-fifth of the world’s oil and LNG shipments. Disruptions in the region have played a central role in driving recent price volatility.
According to brokerage Macquarie, even if tensions ease in the near term, crude is likely to remain firm in the $85–$90 range, with potential to climb back toward $110 as normal shipping flows resume. The firm warned that if disruptions persist through April, Brent prices could spike as high as $150 per barrel.
Echoing a similar outlook, Kayanat Chainwala of Kotak Securities said oil could rise to $120 in the near term and potentially hit $150 if the conflict drags on, underscoring the fragile balance between geopolitical risk and market sentiment.
