Oil prices plunged 7% on Wednesday as growing optimism over a potential peace agreement between the US and Iran eased fears of further disruptions to Middle East oil supplies.
International benchmark Brent crude traded at $102.35 per barrel at 12.48 p.m. local time (0948 GMT), down around 6.8% from the previous close of $109.87.
US benchmark West Texas Intermediate also decreased 7.5% to $94.55 per barrel, compared with $102.27 in the previous session.
Prices eased after renewed diplomatic signals from Tehran and Washington raised hopes that tensions surrounding the Strait of Hormuz could ease following weeks of conflict and military escalation.
According to a report by Axios, the White House see itself nearing a deal with Iran on a one-page memorandum of understanding aimed at ending the war and outlining a framework for more detailed nuclear talks.
Washington anticipates a response from Tehran on various important issues in the next 48 hours, according to two US officials and two other sources, citing the White House, Axios reported.
Meanwhile Iran's Foreign Minister Abbas Araghchi said Wednesday the country remains serious and steadfast in diplomacy while maintaining full readiness to respond to any "malicious act."
Foreign Minister Abbas Araghchi briefed China's Foreign Minister Wang Yi, during a meeting in Beijing, on the latest diplomatic efforts and initiatives aimed at ending the US-Israeli war against Iran, including ongoing negotiations mediated by Pakistan between Tehran and Washington.
"Iran, just as it acted decisively in defending itself and remains fully prepared to confront any aggression, is also serious and steadfast in the field of diplomacy," Araghchi said during the meeting.
The reports follow US President Donald Trump's announced Tuesday that the US military will temporarily pause "Project Freedom," the US effort to secure commercial shipping through the Strait of Hormuz.
Trump said the decision was made at the request of Pakistan and other countries.
While, Pakistan's Prime Minister Shehbaz Sharifon Wednesday welcomed Trump's decision to pause Project Freedom, voicing hope that the current momentum will lead to a lasting peace agreement "that secures durable peace and stability for the region and beyond."
"Pakistan remains firmly committed to supporting all efforts that promote restraint and a peaceful resolution of conflicts through dialogue and diplomacy," Sharif wrote on US social media platform X.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr
