The price of Brent crude experienced a decline of approximately 4% on 25 March, attributed to a potential ceasefire that may alleviate supply disruptions in the Middle East.
This followed reports that the US had proposed a 15-point plan to Iran aimed at ending their ongoing conflict, reported Reuters.
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As of 03:35 GMT, Brent crude futures had dropped by $4.17, or 4%, to $100.32 per barrel (bbl), with earlier declines reaching $97.57.
Similarly, US West Texas Intermediate (WTI) crude futures decreased by $3.11, or 3.4%, settling at $89.24/bbl after falling to $86.72 earlier.
On Tuesday, both oil benchmarks had initially risen by nearly 5% before settling back down amid volatile trading conditions.
US President Donald Trump announced progress in negotiations with Iran, corroborated by a source that confirmed the existence of a 15-point settlement proposal sent from Washington to Tehran.
Channel 2 in Israel was cited by the news agency as reporting that the US is pushing for a month-long ceasefire to facilitate talks over the proposal. This involves dismantling Iran’s nuclear programme, halting support for proxy groups and reopening the Strait of Hormuz.
The ongoing conflict has severely disrupted oil and liquefied natural gas (LNG) shipments through the Strait of Hormuz, a crucial passageway for around one-fifth of global gas and crude supplies.
In an effort to mediate, Pakistan’s Prime Minister, Shehbaz Sharif, offered to host discussions between the US and Iran on Tuesday.
Meanwhile, Iran informed the UN Security Council and International Maritime Organisation that “non-hostile vessels” could navigate the Strait if they coordinate with Iranian authorities, according to Reuters.
Despite these diplomatic efforts, military strikes from the US, Israel and Iran persisted, with sources indicating that Washington is preparing to deploy additional troops to the region.
In response to disruptions in the Strait of Hormuz, Saudi Arabia increased oil exports from its Yanbu port on the Red Sea to nearly four million barrels per day last week.
In the US, recent data from market sources citing American Petroleum Institute figures revealed an increase in crude oil, gasoline and distillate inventories last week.
