Oil Prices Plummet on US Proposal to End Iran War

Oil prices plummeted by around 5% on Wednesday after reports emerged of a 15-point proposal sent by the US to Iran, sparking hopes for an end to the war in the region.

The proposal, which has yet to be reviewed and responded to, appears to be aimed at ending the conflict between Iran and Israel, with Rystad analyst Janiv Shah stating that it 'appears a faster and smoother resolution is being explored'.

However, despite this development, oil prices have remained volatile, with Brent crude futures down $6.08 or 5.82% to $98.41 per barrel, while US West Texas Intermediate crude futures were down $5.09 or 5.51% at $87.26 per barrel.

The disruption in the Strait of Hormuz has resulted in a daily loss of around 20 million barrels of crude, with some 500 million barrels lost over the past 25 days, equivalent to five full days' worth of global supply.

Despite Iran's statement that 'non-hostile vessels' may transit the Strait if they coordinate with Iranian authorities, oil exports from Saudi Arabia's Red Sea Yanbu port have risen sharply to nearly 4 million barrels per day last week to offset the disruptions.