Brent and WTI record sharp declines after diplomatic signals point to reduced tensions and possible reopening of key oil routes……
Global oil prices dropped sharply on Wednesday as easing geopolitical tensions between Iran, the United States, and Israel calmed fears of supply disruptions.
Brent crude oil fell by 13.28 percent to $94.76 per barrel, while West Texas Intermediate declined even further, shedding 14.72 percent to settle at $96.31 per barrel.
The steep decline follows signs of a potential diplomatic breakthrough after Donald Trump announced a temporary halt to planned US military action against Iran. The pause, he said, would last for two weeks and is tied to assurances that safe passage through the Strait of Hormuz will be maintained.
“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir… and subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump stated.
According to him, the temporary ceasefire is intended to allow ongoing negotiations between Washington and Tehran to reach a long-term resolution, noting that both sides are already making significant progress.
Tehran signalled readiness to reciprocate. Seyed Abbas Araghchi, Iran’s foreign minister, said the country would scale back its military response if hostilities come to a halt.
“If attacks against Iran are halted, our powerful armed forces will cease their defensive operations,” he said, adding that safe navigation through the Strait of Hormuz would be guaranteed during the two-week window, pending coordination with military authorities.
He also pointed to behind-the-scenes diplomatic efforts involving Pakistan’s leadership, including Prime Minister Shehbaz Sharif and senior military officials, as key to the de-escalation process.
The Strait of Hormuz, a critical chokepoint for global oil shipments, has been at the centre of market concerns in recent weeks. Any disruption to traffic through the route typically triggers spikes in crude prices due to fears of constrained supply.
Just days earlier, on March 31, Brent crude had surged by 2.38 percent to $117.54 per barrel, reflecting heightened tensions and uncertainty in the region.
With the latest diplomatic signals pointing toward stability, traders appear to be recalibrating expectations, leading to a sharp pullback in prices.
Market watchers say the direction of oil prices in the coming weeks will largely depend on whether the fragile truce holds and if negotiations between the US and Iran translate into a more durable agreement.
