Oil prices fell on Wednesday after U.S. President Donald Trump said that Washington and Tehran are speaking, and indicated Iran is keen to reach a peace agreement, despite the Islamic Republic denying any direct talks with the U.S.
International benchmark Brent crude futures declined 5% to $99.30 U.S. per barrel, while U.S. West Texas Intermediate futures were also down 5.1% at $87.63 per barrel.
Speaking from the Oval Office, Trump said he had pulled back from his earlier threat to launch strikes on Iranian energy infrastructure “based on the fact we’re negotiating.”
Later Tuesday, The New York Times reported that the U.S. had sent Iran a 15-point proposal aimed at ending the war.
According to the report, it remains unclear how widely the proposal, delivered through Pakistan, has been circulated among Iranian officials. It is also uncertain whether Israel, which is carrying out attacks on Iran alongside the U.S., would back the plan.
Iran’s top joint military command spokesperson signaled that oil markets will remain volatile, warning prices won’t normalize until regional stability is secured under its military control.
Separately, Iran’s mission to the United Nations said Tuesday that “non-hostile vessels” would be able to pass through the strategically vital Strait of Hormuz, provided they coordinate “with the competent Iranian authorities.”
The Middle East crisis has severely disrupted oil exports through the Strait of Hormuz since the U.S. and Israel launched strikes against Iran on Feb. 28. The maritime corridor typically carries about a fifth of the world’s oil and liquified natural gas (LNG) and represents a key choke point for fertilizer trade.
