Khaberni - Oil prices fell about 4% on Wednesday, following reports that the United States sent a 15-point plan to Iran to end the war in the Middle East, which bolstered expectations of a potential ceasefire that could ease supply disruptions in the region.
According to Reuters, Brent crude futures fell $3.96 or 3.8% to $100.53 a barrel, while West Texas Intermediate futures fell $3.57 or 3.9% to $88.78 a barrel.
An Iranian official told Reuters on Wednesday that Pakistan had delivered the American proposal to Iran, and that any talks to de-escalate the war, if held, would take place in Pakistan or Turkey.
Iran denied having any direct talks, with a military spokesperson stating that the United States "is negotiating with itself".
Analysts at Ritterbusch and Associates, an energy sector consultancy, noted in a memo that "the recent downward trend in prices is largely linked to the American plan to end the war, and nothing has been issued from Iran indicating a positive response so far. Until there is more clarity on substantial progress, the oil market remains exposed to a potential rise in prices."
The war has disrupted shipments of oil and liquefied natural gas across the Strait of Hormuz, which typically transports about a fifth of global oil and gas supplies, causing what the International Energy Agency described as the largest ever supply disruption.
This disruption represents a daily loss of nearly 20 million barrels, equivalent to about 500 million barrels after 25 days, which is equivalent to 5 full days of global supplies.
A memo reviewed by Reuters on Tuesday revealed that Iran informed the United Nations Security Council and the International Maritime Organization that "non-hostile ships" could pass through the Strait of Hormuz provided they coordinated with Iranian authorities.
As compensatory measures to reduce the impact of supply disruptions, shipping data showed that oil exports from the Saudi port of Yanbu on the Red Sea rose to about 4 million barrels per day last week, a sharp increase compared to quantities before the war erupted.
The U.S. Energy Information Administration reported that energy companies added 6.9 million barrels of crude to inventories in the week ending March 20, exceeding analysts' expectations who had anticipated an increase of only 0.5 million barrels, and also exceeding an increase of 2.4 million barrels reported by the American Petroleum Institute the previous Tuesday.
