Oil prices slide as optimism for ceasefire grows

MUSCAT/LONDON: Oil prices fell sharply on Wednesday, retreating about 4 per cent amid renewed optimism over a potential ceasefire in the Middle East that could ease supply disruptions.
Brent crude dropped $4.17 to $100.32 per barrel by 0708 GMT, after touching an intraday low of $97.57. US West Texas Intermediate (WTI) declined $3.11 to $89.24, having earlier slipped to $86.72. The decline follows a near 5 per cent rally in the previous session, underscoring continued market volatility.
Market sentiment softened after reports that the United States had presented Iran with a 15-point proposal aimed at ending the conflict. US President Donald Trump said progress was being made in negotiations, while media reports indicated the proposal includes a temporary ceasefire to facilitate broader discussions, including issues related to Iran’s nuclear programme and regional security.
Analysts noted that while expectations of a ceasefire have increased, uncertainty persists over the outcome of negotiations. “Profit-taking is also weighing on prices, although the overall outlook remains unclear,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
Despite easing prices, supply concerns remain significant. The conflict has severely disrupted oil and liquefied natural gas shipments through the Strait of Hormuz, a critical artery that typically carries around one-fifth of global energy supplies. The International Energy Agency has described the situation as an unprecedented supply shock.
Industry analysts caution that even if flows resume, a full recovery in production may take time pending clarity on the durability of any ceasefire. Meanwhile, geopolitical tensions remain elevated, with continued military activity reported across the region.
Efforts to mitigate disruptions have seen Saudi Arabia increase exports via its Red Sea Yanbu port, with shipments rising to nearly 4 million barrels per day last week.
In the United States, inventory data added further pressure on prices. Market sources citing the American Petroleum Institute reported increases across crude, gasoline and distillate stocks for the week ending March 20.
Meanwhile, Oman crude for May delivery was priced at $109.55 on Wednesday, down $30.09 from the previous session. The average price for March delivery stood at $62.17 per barrel, marginally higher than February levels. — Agencies