Oil Prices Slide as Diplomatic Progress Sparks Hope for Middle East Ceasefire

Oil prices fell on Wednesday, extending declines from the prior session, as media reports suggested progress in diplomatic efforts to halt hostilities in the Middle East and reopen the Strait of Hormuz.

The Brent crude futures, the global oil benchmark, dropped by 1.6% to $87.22 a barrel by 09:43 ET (13:43 GMT), while U.S. West Texas Intermediate crude futures declined by 1.3% to $81.31 a barrel.

Oil prices had slumped over 5% on Tuesday after Russian media reported that the U.S. and Iran were close to a fresh ceasefire deal, citing Pakistani and Iranian sources.

A reported arrangement between the two countries includes free navigation through the Strait of Hormuz, expected to be announced in the coming days.