Crude oil prices fell sharply on Wednesday, slipping below the $100 per barrel mark after a reduced fears of supply disruption.
Brent crude dropped to around $94–95 per barrel, while US WTI crude fell to about $96, marking a steep fall of over 13% in a single session.
The fall in oil prices comes after US President announced a two-week ceasefire agreement with , brokered with support from Pakistan.
The , a key route through which nearly 20% of the world’s oil supply passes.
With the risk of supply disruption easing, traders moved quickly to unwind positions, leading to a sharp correction in prices.
The fall comes after a strong rally in recent weeks, when crude had surged above $110 per barrel amid fears of war and supply cuts.
Concerns over possible attacks on oil infrastructure and disruption to shipping routes had pushed prices to multi-year highs.
Analysts say the sharp drop reflects the removal of the “risk premium” that had built into oil prices during the conflict.
As tensions ease, at least for now, markets are pricing in better supply visibility and smoother shipping flows through the region.
However, the ceasefire is temporary and conditional, which means volatility is likely to continue.
Despite the fall, oil prices remain higher than pre-conflict levels, indicating that markets are still cautious.
Any breakdown in the ceasefire or renewed tensions could quickly push prices higher again.
For now, the easing of geopolitical risk has provided short-term relief to global markets, including countries like India that depend heavily on oil imports.