Oil Prices Plunge as Tensions Ease Between US and Iran

Oil prices dropped to a two-week low on Tuesday, falling 5% as hopes for an easing of tensions between the US and Iran rose. Brent futures declined $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 fell $4.06, or 4.9%, to $78.55.

Oman has presented Iran with a plan to manage the Strait of Hormuz, including collecting voluntary fees for using it, in an effort to end disruption to trade through the strait caused by the US-Israeli war on Iran. A senior Iranian source told Reuters that Tehran had yet to respond to the Omani proposals.

The Strait of Hormuz is a critical waterway for global oil supplies, with about one-fifth of the world's oil passing through it before the war began in February. The disruption has led to increased tensions between major oil-producing countries and trading partners.

A stronger US dollar also made oil more expensive for many global buyers, as central banks raise interest rates to fight inflation by boosting consumer borrowing costs, which can slow economic growth and dent demand for oil.