Oil prices fell by about 5% during trading on Wednesday, amid expectations that a ceasefire could be reached that would ease supply disruptions in the Middle East, following reports that America had sent Iran a 15-point plan to end the war between them.
Brent crude futures fell 4.8% to $99.41 a barrel.
Meanwhile, U.S. West Texas Intermediate crude futures fell by 3.9% to $88.69 a barrel.
Both crude oil benchmarks had risen by about 5% during trading on Tuesday, before their gains were reduced in a volatile session after the close.
Hiroyuki Kikukawa, senior analyst at Nissan Securities Investment, said that expectations for a ceasefire have risen slightly, which is pushing the market towards profit-taking.
He added to Reuters that expectations are still uncertain regarding the success of the negotiations, which is limiting the pace of the sale.
He noted that oil prices could rise again if fighting resumes or if Iranian attacks extend to energy facilities in neighboring countries.
In the same context, US President Donald Trump said on Tuesday that the United States is making progress in its efforts to negotiate an end to the war with Iran, while a source confirmed that Washington had submitted a 15-point settlement proposal.
Israel's Channel 12 reported that the United States is seeking a month-long ceasefire to discuss the plan, which includes dismantling Iran's nuclear program, halting support for groups allied with Tehran, and reopening the Strait of Hormuz.
For his part, Pakistani Prime Minister Shehbaz Sharif announced yesterday his readiness to host talks between the United States and Iran to end the ongoing conflict between them.
In contrast, Iran on Monday denied entering into negotiations with the United States.
A memo seen by Reuters on Tuesday showed that Iran had informed the UN Security Council and the International Maritime Organization that non-hostile vessels could pass through the Strait of Hormuz, provided they coordinated in advance with Iranian authorities.
