LONDON: Global crude oil prices fell sharply after reports that China had stepped up diplomatic efforts to revive stalled peace talks between the United States and Iran, easing concerns over potential supply disruptions.
According to international media reports, Brent crude settled at $96.78 per barrel, down 3.88 percent, while U.S. West Texas Intermediate (WTI) fell 3.12 percent to $89.31 per barrel. Despite the decline, both benchmarks remained on track for weekly gains.
Oil prices had surged in recent days following exchanges of missile attacks between the United States and Iran, reduced shipping activity through the Strait of Hormuz, and attacks on vessels in the Red Sea by Yemen’s Houthi group.
Market analysts said reports of China’s diplomatic initiative raised hopes of easing regional tensions, putting downward pressure on crude prices.
Meanwhile, U.S. President Donald Trump warned of a “major military response” against Iran and the Houthis following attacks on Saudi oil tankers. Reports also suggested Iran was urging the Houthis to close the strategic Bab al-Mandab waterway.
A shipping monitoring agency said tanker traffic through the Strait of Hormuz remained limited, while maritime activity through Bab al-Mandab showed some improvement compared with the previous day.
JPMorgan analysts warned that if disruptions to global oil supplies continue for several months, the average price of Brent crude could rise to $114 per barrel.
Separately, Russia claimed its forces had struck Ukrainian port infrastructure, while Kazakhstan confirmed a temporary reduction in oil production after drone attacks disrupted operations at a key export terminal.
