U.S. crude oil prices dipped below $100 per barrel on Wednesday, driven by President Trump’s announcement that negotiations with Iran are in their final stages. West Texas Intermediate futures plummeted over 6% to $97.74, while Brent futures also fell nearly 6% to $104.62. The shift in sentiment comes as Trump indicated a preference for diplomacy over military action, potentially easing tensions that have kept markets on edge.

This development is significant for the oil market, as it suggests a possible resolution to the ongoing blockade in the Strait of Hormuz, a critical route for global oil supplies. Citibank cautioned that the market may be underestimating the risks of prolonged disruptions, projecting Brent could rise to $120 per barrel if tensions escalate. Conversely, Wood Mackenzie highlighted that swift peace could lead prices to drop significantly, with Brent potentially easing to around $80 per barrel by 2026.

Market professionals should monitor these negotiations closely, as their outcomes could drastically influence oil price trajectories and overall market stability in the coming months.

Source: cnbc.com