Oil Prices Plummet on US-Iran Ceasefire Hopes

Oil prices plummeted by nearly 6% on Wednesday after reports emerged that the United States had sent Iran a 15-point proposal aimed at ending the war, sparking hopes of a ceasefire. Brent crude futures fell $6.08 to $98.41 per barrel, while U.S. West Texas Intermediate crude dropped $5.09 to $87.26.

The proposal, which has yet to be reviewed by Iran, comes as Israel and Iran exchanged airstrikes, further escalating tensions in the region. Despite this, analysts believe that a ceasefire is possible, with Rystad analyst Janiv Shah stating that 'a faster and smoother resolution is being explored'.

However, Iran has denied direct talks with the U.S., with an Iranian military spokesman claiming that the U.S. is negotiating with itself. Meanwhile, Blackrock CEO Larry Fink warned of global recession if oil prices remain at $150 per barrel, a prospect that could become a reality if Iran remains a threat to the Strait of Hormuz.

The war has halted oil shipments through the strait, resulting in a daily loss of 20 million barrels and a total of 500 million barrels over the past 25 days. Saudi Arabia has increased exports from its Red Sea port to offset this disruption, while Russia's Baltic ports have suspended crude oil loadings due to Ukrainian drone attacks.