-- Oil prices declined sharply on Wednesday falling below $100 per barrel mark as diplomatic momentum built around a reported one-page memorandum to end the war between US and Iran.
The Brent futures contract fell 5.5% to $103.83 per barrel and touched $96 earlier in the session. Murban futures dipped over 7% to $98.29 a barrel.
The White House is reportedly nearing a breakthrough with Tehran on a one-page memorandum of understanding designed to end the current conflict, several media outlets reported Wednesday.
According to a report by Axios on Wednesday, which was later confirmed by a Reuters' report, citing a Pakistani source involved in the mediation, the two nations are currently the closest they have been to an agreement since hostilities began.
Analysts noted that the prospect of a ceasefire and the potential reopening of the Strait of Hormuz outweighed immediate supply concerns, sending prices lower across the board.
The market sentiment shifted after Trump previously announced a brief suspension of Project Freedom.
Trump cited significant progress toward a settlement with Tehran but offered few specific details, even as he confirmed the US Navy would maintain its blockade of Iranian ports.
While Tehran has yet to respond officially, ANZ analysts noted that crude gave up recent gains as the regional ceasefire appeared to hold despite the diplomatic tension.
Despite the diplomatic opening, the Strait of Hormuz remains effectively obstructed.
ANZ highlighted that Iran has implemented a restrictive new transit protocol requiring official email approval for all vessels.
With global stockpiles under increasing pressure, investors are now focused on the upcoming US Energy Information Administration inventory report to gauge the severity of the ongoing supply drain.