-- Global oil benchmarks plunged nearly 5% on Thursday amid hopes of a diplomatic breakthrough between Washington and Tehran.
Brent futures declined 3.4% to $97.82 per barrel, and Murban futures also fell 3.6% to $91.63/bbl.
"US-Iran peace hopes moved from a geopolitical headline to the main macro driver," Saxo Bank analysts said.
Market optimism has been tempered by a diplomatic impasse.
Although President Trump has paused naval escort missions under "Project Freedom" to signal progress toward a peace deal, Tehran maintains that formal negotiations are impossible so long as the US naval blockade remains in effect.
"Iran is expected to respond in the coming days, with nuclear talks likely to follow later. The catch is that talks are not a deal, and oil has already rebounded this morning as investors reassess how firm the progress really is. Good news, but not yet a holiday brochure," Saxo Bank analysts added.
On the supply side, the US Energy Information Administration reported a 2.3 million barrels decrease in domestic crude inventories for the week ending May 1, bringing total stocks down to 457.2 mmbbls.
This drawdown was accelerated by a historic surge in American oil product shipments.
US petroleum product exports hit a record 8.2 million barrels per day last week, the highest level since the EIA began tracking the data in 1991, the agency said.