Global crude benchmark prices dropped nearly 2% in early Asian trading on Wednesday, extending a sharp sell-off from the prior session. Energy traders pulled back risk premiums following diplomatic breakthroughs regarding the strategic Strait of Hormuz.
According to market data reported, international benchmark Brent crude futures dropped $1.78, or 2.0%, to $86.80 a barrel. Concurrently, U.S. West Texas Intermediate (WTI) fell $1.49, or 1.8%, to $80.87.
The downward movement follows Tuesday’s steep session where both benchmark contracts plunged over 3%. Momentum shifted rapidly after Tehran confirmed it had reactivated bilateral negotiations with neighboring Muscat to secure a maritime management protocol.
Preliminary discussions focus on establishing a temporary joint navigational corridor through the waterway, which handles roughly 20% of the world’s daily petroleum supply. Both regional powers also agreed to initiate mine-clearing operations.
Market sentiment was further weighed down by broader macroeconomic context, including API reports indicating a surprise 4.2 million barrel build in U.S. crude inventories, alongside softer-than-expected Washington sanctions that omitted secondary penalties on major Asian importers.
Despite the two-day decline, analysts note that price floors remain supported. Bargain hunting and lingering structural volatility are expected to hold crude within a tight consolidation channel short-term.
