Global oil prices dipped in Asian trading on Wednesday after US President Donald Trump hinted at a possible diplomatic breakthrough with Iran, raising hopes of easing tensions in the Middle East and stabilising global energy markets.
Brent crude, the international benchmark, dropped 1.7 percent to $108 per barrel, while US crude declined 1.6 percent to $100.60 a barrel after Trump announced a temporary pause in a US-led naval operation in the Strait of Hormuz.
The operation, known as Project Freedom, was launched to protect ships passing through the strategic waterway after Iran threatened to target vessels in response to ongoing US-Israeli strikes that began on February 28. Nearly 20 percent of global oil and gas supplies pass through the Strait of Hormuz.
Trump said the operation would be suspended briefly to allow room for diplomacy.
“Great progress has been made toward a complete and final agreement with representatives of Iran,” he wrote on social media, adding that the US remained committed to restricting vessels linked to Iranian ports as part of broader economic pressure measures.
The announcement helped calm markets after oil prices surged more than six percent earlier this week amid fears that escalating attacks in the region could disrupt global supply chains.
Investment strategist Charu Chanana of Saxo said the move suggests Washington may be willing to pursue diplomacy, but warned that markets remain cautious.
“The key question for oil traders is whether this leads to real progress in reopening trade through the Strait of Hormuz,” she said. “For now, there is little evidence of that.”
US Secretary of State Marco Rubio also indicated that Washington was prioritising diplomacy after claiming its military objectives in Iran had been achieved.
“We would prefer the path of peace. What the president would prefer is a deal,” Rubio said.
Iran has yet to officially respond to the latest remarks, although parliamentary speaker Mohammad Ghalibaf warned that Tehran was far from backing down.
The recent tensions have rattled global markets, with traders closely watching developments in the Gulf amid fears of a prolonged oil supply crisis.
