Oil prices fell by 4% on March 25 after the possibility of a ceasefire in the ongoing US-Iran war. This development has eased supply disruptions in the Middle East's key oil-producing region.
In recent weeks oil prices have exceeded typical levels. It has led to global tensions and a crisis. However, with US giving Iran with a 15-point plan to end the conflict oil market is starting to see a glimmer of hope.
The latest price reports suggest Brent crude oil dropped from $4.89 (about 4.7%) to $99.60 a barrel by 03:35 GMT, after falling to a low of $97.57. The market for the US West Texas Intermediate (WTI) crude futures went down $3.54 to $88.81 a barrel after falling to as low as $86.72.
Both oil benchmarks saw a surge of about 5% on Tuesday before posting further gains in volatile post-settlement trading. In line with this, Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment a unit of Nissan Securities said, “Expectations of a ceasefire have risen slightly, and profit-taking is leading the market. But the outlook remains uncertain as to whether negotiations will succeed, limiting selling.”
On March 24, US President Donald Trump announced that the United States was making progress in negotiating an end to the conflict with Iran. A separate source confirmed that Washington had shared a 15-point settlement proposal with Iran.
Additionally a report from Israel's Channel stated that the US was seeking a month-long ceasefire to discuss the proposal. This plan is likely to include measures to pause Iran's nuclear program, which could lead to the reopening of the Strait of Hormuz and the cessation of support for proxy groups.