Global oil prices plunged sharply on Wednesday after U.S. President Donald Trump delivered a peace proposal to Iran, spurring optimism about a potential de‑escalation of the recent Middle East conflict and triggering broad gains in financial markets.
Brent crude, the international benchmark, fell 5.92% to $98.30 per barrel, while West Texas Intermediate (WTI) dropped 5.01%, settling around $87.72 in early trading.
The sharp decline came as investors reacted to reports that Trump sent a 15‑point peace plan to Tehran aimed at ending weeks of hostilities that have severely disrupted energy markets. Risk assets including U.S. stock futures climbed, with major indexes in Asia rallying more than 3%.
The U.S. proposal was interpreted by some market participants as signalling an off‑ramp to the conflict, particularly after Iran indicated it would allow non‑hostile oil tankers to transit the Strait of Hormuz, a vital shipping lane that accounts for nearly one‑fifth of global crude exports.
Despite the rally, uncertainty persists. Iran has denied engaging in direct negotiations or formal talks with the United States, and new violence, including missile activity causing injuries in Israel, continues to underscore the fragility of geopolitical stability in the region.
Market analysts cautioned that the recent drop in crude prices reflects speculative repricing rather than confirmed diplomatic progress, noting that oil markets remain highly sensitive to shifts in conflict dynamics.