US crude oil prices fall below $90 amid hopes of Iran diplomatic breakthrough

DUBAI: Global oil markets plunged on Wednesday after reports suggested that the United States is nearing a potential agreement with Iran to end the ongoing conflict and reopen the Strait of Hormuz.

US crude oil dropped by 12 per cent, falling below $90 per barrel, as investors reacted to signs of possible de-escalation in tensions. Brent crude also declined sharply by around 11 per cent, slipping to under $100 per barrel.

The market reaction followed an Axios report indicating that Washington and Tehran are working on a preliminary framework for a deal aimed at ending the war and laying the groundwork for broader nuclear negotiations. The prospect of reopening the vital Strait of Hormuz, a key global oil shipping route, further boosted hopes of improved supply flows.

The diplomatic signals triggered a wave of selling in oil markets, with traders pricing in reduced risk of supply disruption after months of volatility linked to the conflict in the Middle East.

Despite the sharp decline, analysts caution that uncertainty remains high until any formal agreement is confirmed.