- US sends peace plan to Iran, signs of de-escalation emerge.
- Iran says “non-hostile” vessels can pass through the Strait of Hormuz.
- West Texas Intermediate fell 5.01% to $87.72.
Brent crude, the global market benchmark, fell close to 6% on Wednesday after US President Donald Trump sent a peace plan to Iran.
By 0030 GMT, Brent crude was down 5.92% at $98.30 a barrel. The benchmark US oil contract, West Texas Intermediate, fell 5.01% to $87.72.
In Asian markets, Japan’s Nikkei index and South Korea’s Kospi rose more than 3%.
Trump sent a peace plan to Iran as he expressed optimism on Tuesday about ending nearly a month of war in which Tehran announced it will allow “non-hostile” oil vessels to pass through the crucial Strait of Hormuz.
The tentative signs of a diplomatic solution came despite fresh violence, with an Iranian missile causing damage in Israel, which again pressed on several fronts and vowed to take control of a swath of southern Lebanon.
The drop in oil on Wednesday came after prices rose a day earlier as traders became cautious about the prospect of a negotiated deal to end the war.
Trump, whose statements in recent days have ranged from promising massive strikes on Iran to declaring the nearly month-long war virtually over, said the United States is “in talks right now” with Iran, which has not confirmed any formal talks.
“They did something yesterday that was actually amazing. They gave us a gift and the gift arrived today. And it was a very large gift that was worth an enormous amount of money,” Trump told reporters in the Oval Office.
“That meant one thing to me – we’re dealing with the right people.”
He did not elaborate, but said it was related to the Strait of Hormuz, which Iran has largely blocked in retaliation for US and Israeli strikes, sending global energy prices skyrocketing.
Iran, in a statement circulated by the International Maritime Organization soon after, assured safe passage for “non-hostile vessels” passing through the strait, the gateway to a fifth of the world’s oil.
Iran had already said in recent days that it was not targeting friendly nations, although many vessels have shied away as insurers refuse to take risks.
