Oil Prices Drop 11% as US–Iran Peace Deal Nears, Easing Global Supply Fears

Global oil prices experienced a sharp decline on Wednesday as Brent crude dropped about 11 percent, slipping below $100 per barrel. The fall came amid rising optimism that the United States and Iran are moving closer to a diplomatic agreement aimed at ending ongoing hostilities in the Gulf region.

Market sentiment shifted after reports emerged that Iran was reviewing a new proposal from the United States. According to diplomatic sources, both nations are working toward a short-form agreement that could pause the conflict and open the door for broader negotiations on long-term peace and stability.

The proposed deal reportedly includes plans to reopen key shipping routes through the Strait of Hormuz, ease US sanctions on Iran, and restart discussions around Tehran’s nuclear programme. Oil traders reacted swiftly, triggering a broad sell-off as fears of supply disruptions began to fade.

Brent crude, which had been trading at around $108 per barrel, fell sharply to about $98 as optimism over a possible breakthrough grew. Analysts say the market is highly sensitive to developments in the region, especially given the Strait of Hormuz’s role as a critical global oil transit route.

Despite the positive signals, uncertainty remains. Some officials and analysts caution that major disagreements are still unresolved, particularly around Iran’s nuclear activities and US security demands. Iranian lawmakers have also expressed skepticism, suggesting the current proposal may not reflect a balanced agreement, while mediators say talks are progressing but not yet finalised.

source: punch