Oil prices slumped more than 6% on Wednesday, with Brent crude falling below $100 a barrel, as signs of de-escalation eased fears of supply disruptions.
As of 5:18 a.m. (01:18 GMT), Brent crude futures for May were down 6.3% at $97.90 per barrel, while West Texas Intermediate (WTI) futures were down 5.2% at $87.52 per barrel. The drop followed reports that the United States had sent Iran a 15-point plan aimed at ending the war in the region, raising hopes for a ceasefire and reduced risks to key oil shipping routes, including the Strait of Hormuz.
US President Donald Trump said Washington is "talking right now" with Iran, adding that Tehran is "talking rationally" and appears committed to a peace deal.
Earlier, Trump described talks with Iran as "productive" on Monday, but Iranian officials denied any talks were underway, highlighting the ongoing uncertainty surrounding the situation.
Oil markets have risen sharply in recent sessions amid concerns that escalating tensions could disrupt supplies from the Middle East, a key production region. Concerns have focused on the Strait of Hormuz, a critical chokepoint for global crude flows. Wednesday's sharp selloff reflected a rapid unwinding of the geopolitical risk premium as traders reacted to signs that tensions could ease.
Analysts noted that while the prospect of de-escalation put pressure on prices, conflicting signals from Washington and Tehran are likely to maintain market volatility.