Oil prices fell sharply in early Asian trade on Wednesday as hopes of a ceasefire in the West Asia conflict pushed traders to reduce risk positions. Brent crude fell below $100 per barrel, while West Texas Intermediate also moved lower. The decline came after fresh signals of possible US-Iran contact, though military action in the region continued.
Brent crude for May delivery traded at $98.87 per barrel at 8:15 a.m., down 5.59% from its previous close. West Texas Intermediate for May delivery fell 4.33% to $88.31 per barrel. Later in the session, Brent was seen near $98.03, while WTI traded around $87.51.
The fall followed reports of possible diplomatic movement between the United States and Iran. US President Donald Trump said talks were moving forward and described Iran as “talking sense.” Market activity also reacted to reports of a possible settlement framework and a temporary ceasefire plan.
Iran denied that it was holding direct talks with the United States. Even so, traders responded to signs that proposals were being discussed. A reported 15-point framework and a possible one-month ceasefire helped ease some of the fear that had pushed oil prices higher in recent days.
At the same time, military action did not stop. Strikes continued in Iran, including an attack in Tehran that killed 12 people and injured 28 others. Iran and Hezbollah also launched a fresh wave of missiles toward Israel, with at least one death and several injuries reported. The fighting kept the market alert even as prices moved lower.
Another factor behind the drop was a message from Iran on shipping through the Strait of Hormuz. Iran stated that “non-hostile vessels” could pass through the route in coordination with Iranian authorities. That helped reduce some immediate concern over disruption in one of the world’s most important oil transit channels.
Still, supply fears have not fully eased. Reports pointed to fresh security steps in the region, including possible new US military deployment. There were also threats of wider action involving Hezbollah. A drone strike on a fuel tank at Kuwait International Airport added to concerns over energy infrastructure and transport safety.
The recent fall came after oil had climbed to around $119 per barrel last week. India has already felt the effect of that rise. As of March 23, the Indian crude basket stood at $157.04 per barrel. In March so far, it has averaged $121.64 per barrel, compared with $69.01 in February.
India imports nearly 90% of its oil needs, so changes in crude prices directly affect its import costs. A sustained increase of $1 per barrel over one year can raise the country’s annual import bill by about ₹16,000 crore. Prime Minister Narendra Modi told the Rajya Sabha on Tuesday that the government was closely monitoring the situation.
The government has also formed seven empowered groups to address risks linked to defence, external affairs, finance, supply chains, petroleum, LNG, LPG, transport, agriculture inputs, essential commodities, and public communication. These groups have been asked to assess the situation and take immediate steps where needed.