U.S. crude oil prices fell more than 4% on Wednesday after President Donald Trump indicated that negotiations with Iran are in the final stages, according to a report from CNBC.
West Texas Intermediate (WTI) futures dropped nearly 5% to $99.08 per barrel by midday, signaling a sharp repricing of geopolitical risk in the energy sector.
The Strait of Hormuz handles about 20% of the world's oil shipments, and any disruption there has historically led to sharp price spikes.
The market reaction follows a broader trend of easing concerns over potential disruptions in the Strait of Hormuz, a critical oil shipping route.
Recent reports have highlighted growing optimism that a diplomatic resolution could be reached, reducing the likelihood of military action or sanctions that might disrupt oil exports from the region.
Energy analysts note that the decline in oil prices is a direct response to the perceived reduction in supply-side risks.
The Strait of Hormuz handles about 20% of the world's oil shipments, and any disruption there has historically led to sharp price spikes.