Oil Prices Plummet as Iran-Oman Talks Revive Hopes for Strait of Hormuz Reopening

Oil prices plummeted over 2% on Wednesday as renewed Iran-Oman talks offered a glimmer of hope for stability in the Strait of Hormuz, a critical waterway through which a fifth of the world's oil and LNG pass.

The US has imposed heavy sanctions on Iran, but diplomatic efforts continue to find a solution. The resumption of talks between Tehran and Muscat revived hopes of a potential reopening of the strait.

Iran and Oman are discussing establishing a 'temporary navigational corridor' through the Strait of Hormuz, which would allow for the passage of oil tankers and other vessels. This comes as the US imposes 'crushing economic pressure' on Iran, with President Donald Trump threatening to hit Tehran and its allies with 'draconian sanctions.'

The international benchmark Brent crude futures dropped $1.78, or 2%, to $86.8 a barrel by 0027 GMT on Wednesday. Meanwhile, US West Texas Intermediate crude futures fell $1.49, or 1.8%, to $80.87.