Benchmark crude Brent crude oil dropped sharply to around $105 per barrel, down from $111 the previous day, according to Oilprice.com data. The U.S. benchmark WTI crude oil also declined, slipping to about $98 per barrel from $105.
The pullback came after U.S. President Donald Trump indicated that negotiations with Iran were entering their final phase, raising hopes of a possible de-escalation in one of the world’s most sensitive oil-producing regions. However, he also warned that further military action could follow if a deal is not reached.
Iranian officials struck a cautiously cooperative tone, with Foreign Ministry spokesperson Esmaeil Baghaei saying Tehran was willing to “develop protocols for safe shipping traffic” with regional states, though he offered no detailed framework.
Despite the apparent diplomatic progress, energy traders remain wary. The Strait of Hormuz — a critical passageway for global oil shipments — continues to dominate market concerns, with supply risks still elevated even amid talks.
Analysts warn that the market may be underestimating the possibility of prolonged disruption. Some projections suggest Brent could climb toward $120 per barrel in the near term if tensions persist, while energy consultancy Wood Mackenzie has floated an extreme scenario in which crude prices could approach $200 if the Strait of Hormuz remains largely closed for an extended period.
That chokepoint remains central to global energy flows, with roughly one-fifth of the world’s oil passing through it under normal conditions.
Shipping activity in the region has been heavily disrupted in recent months. Before the crisis, between 125 and 140 vessels transited the strait daily. That number has reportedly fallen to around 10 vessels per day, including smaller cargo and chemical carriers, reflecting ongoing security concerns.
Recent data from shipping trackers shows some movement returning. Three supertankers carrying roughly 6 million barrels of crude reportedly crossed the strait after being delayed in the Gulf for more than two months. One of them — a South Korean-flagged Very Large Crude Carrier — is now en route to Ulsan for delivery to major refiner SK Energy.
Even so, overall traffic remains subdued, with analysts noting that crude tankers still make up only a small portion of total maritime movement through the corridor.
The geopolitical standoff — described by reports as a prolonged US-Israel conflict with Iran — has continued to weigh heavily on global supply chains since late February, stranding thousands of seafarers and disrupting normal trade flows.
For now, traders appear caught between two competing forces: the potential for diplomatic breakthroughs that could ease supply risks, and the possibility that negotiations collapse, triggering another spike in prices.
As one market watcher summarized, the oil market is “still pricing hope — but not certainty.”