Oil Prices Plunge 5% Amid Hopes for Iran Conflict Resolution

Oil prices plummeted 5% to a two-week low on Tuesday as investors breathed a sigh of relief over hopes for a resolution to the Iran conflict. The Brent futures benchmark fell $4.61, or 5.2%, to $83.75 a barrel at 12:01 p.m. EDT (1601 GMT), while U.S. West Texas Intermediate (WTI) crude dropped $4.06, or 4.9%, to $78.55.

The price decline comes after a 17% drop over three days for both crude benchmarks, which are on track for their lowest closes since July 13. Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz, including collecting voluntary fees for using it, according to a Gulf source and a Western diplomat.

The Iranian government has yet to respond to the Omani proposals, intended to end the disruption to trade through the strait caused by the U.S.-Israeli war on Iran. Before the war began on February 28, about a fifth of global oil supplies flowed through the Strait of Hormuz.