Oil Prices Plunge Nearly 10% on US-Iran Deal Hopes as Global Markets Rally

Oil prices fell sharply on Wednesday, dropping close to 10%, as investors reacted to growing optimism that the United States and Iran may be moving toward easing tensions. The possibility of a preliminary agreement between both countries sparked a wave of selling in crude markets while boosting global equities.

Brent crude slid 8.58% to $100.40 per barrel, while US West Texas Intermediate (WTI) dropped 9.82% to $92.23 by mid-day trading in West Africa time. The decline marks one of the steepest single-day falls in recent months, reflecting how quickly sentiment has shifted in the energy market.

The sell-off was triggered by reports that Washington and Tehran are discussing a short framework aimed at pausing hostilities and opening the door for broader negotiations. Market analysts say traders are quickly unwinding the “risk premium” that had pushed oil higher amid fears of supply disruption.

Adding to the shift in sentiment, US President Donald Trump announced a temporary pause on “Project Freedom,” a plan linked to reopening the Strait of Hormuz. He said the decision followed “great progress” in diplomatic discussions, raising hopes that tensions in the critical oil transit route may ease.

Despite the market optimism, Iranian officials have urged caution. Foreign Minister Abbas Araghchi said Tehran would only agree to a “fair and comprehensive agreement,” noting that major disagreements remain. While diplomacy continues, financial markets across the US, Europe, and Asia rallied on expectations that a breakthrough could stabilize global energy supply chains.

source: Business day