- US sends peace plan to Iran, signals of de-escalation emerge.
- Iran says “non-hostile” vessels can pass through Hormuz.
- West Texas Intermediate was down 5.01% at $87.72.
Brent crude oil, the global market benchmark, dropped close to 6% Wednesday after US President Donald Trump sent a peace plan to Iran.
At around 0030 GMT, a barrel of Brent crude was down 5.92% at $98.30. Benchmark US oil contract, West Texas Intermediate, was down 5.01% at $87.72.
In Asian markets, Japan’s Nikkei index and South Korea’s Kospi were up by more than 3%.
Trump sent a peace plan to Iran as he voiced optimism Tuesday at ending nearly a month of war, with Tehran announcing that it will let “non-hostile” oil vessels go through the crucial Strait of Hormuz.
The tentative signs of a diplomatic solution came despite new violence, with an Iranian missile causing injuries in Israel, which in turn pressed on multiple fronts and vowed to seize control of a strip of southern Lebanon.
The fall in oil Wednesday came after prices jumped a day earlier, with traders turning cautious over the prospect of a negotiated agreement to end the war.
Trump, whose pronouncements in recent days have swung wildly from vowing massive attacks on Iran to declaring the nearly month-long war virtually over, said the United States was “in negotiations right now” with Iran, which has not confirmed any formal talks.
“They did something yesterday that was amazing, actually. They gave us a present, and the present arrived today. And it was a very big present worth a tremendous 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 explain further but said it related to the Strait of Hormuz, which Iran has largely blockaded in retaliation for US and Israeli strikes, sending global energy prices soaring.
Iran, in a message circulated by the International Maritime Organisation shortly afterwards, assured safe passage to “non-hostile vessels” going through the strait, the gateway for one-fifth of the world’s oil.
Iran had already, in recent days, said it was not targeting friendly nations, although many vessels have shied away as insurance companies refuse to take risks.
