Oil Prices Plummet as Iran-Oman Talks Ease Strait of Hormuz Fears

Crude oil prices retreated sharply on Thursday as diplomatic maneuvering between Iran and Oman over the management of the Strait of Hormuz tempered fears of an immediate supply disruption. The decline partially reversed a massive rally from the previous session, even as the United States launched fresh military strikes on Iranian targets.

Brent crude, the international benchmark, fell 4.8% to trade near $84 a barrel, erasing a significant portion of the 7.9% surge recorded on Wednesday. US benchmark West Texas Intermediate (WTI) crude dropped 4.1% to around $79 a barrel, giving up its 6.5% gain from the prior session.

The catalyst for the sell-off was a report from Iran's Labour News Agency indicating that negotiations between Tehran and Muscat over the strategic waterway are progressing. Iran has proposed a joint arrangement under which the two nations would cooperatively oversee shipping transit, managing traffic in one direction through the strait while Oman would control the opposite lane.