Oil prices declined sharply early Wednesday as reports surfaced of a potential path toward de-escalation in the Middle East. Around 12:30 AM GMT, Brent crude futures fell 5.92% to $98.30 per barrel.
West Texas Intermediate (WTI) crude also saw a decline, dropping 5.01% to $87.72 a barrel, according to France Press. Asian markets reacted positively, with the Nikkei Japanese index and the South Korean Kospi both rising more than 3%.
President Trump affirmed on Tuesday that the United States is currently in negotiations with Iran to achieve a ceasefire.
Trump also stated that Iran had offered the U.S. A “very big gift” regarding oil and gas, though he did not elaborate on the specifics. The news comes as oil prices have been elevated following recent geopolitical tensions.
The Modern York Times reported earlier that direct communication had taken place in recent days between Iranian Foreign Minister Abbas Araqchi and Trump’s special envoy, Steve Witkoff, although neither side has confirmed this. According to the report, Washington presented Iran with a 15-point plan aimed at ending the conflict in the Middle East.
Trump had previously indicated on Monday that Washington was in contact with an unnamed Iranian leader whom he described as “the man I think is more respectful, he’s the leader” and “very rational.” He clarified, however, that this individual was not Iranian Supreme Leader Mojtaba Khamenei.
Oil prices had been rising in the wake of the U.S.-Israeli action involving Iran, creating economic and political pressure on Trump ahead of the midterm elections. The average U.S. Gasoline price currently stands at $3.95 per gallon, up from $2.94 a month ago.
