Oil Drops Nearly 3% as U.S.–Iran Diplomacy Eases War Risk Premium

Overview

• WTI for March settled at $62.84, down 2.85%, while April Brent fell 2.71% to $67.52.
• Turkish officials said Washington and Tehran appeared more flexible on a nuclear accord, and President Donald Trump said a pact could be reached as soon as next month.
• Earlier gains had followed a U.S. maritime notice urging ships near Iran to stay as far away as possible and reports that the White House weighed seizing Iranian oil tankers and sending a carrier group.
• Analysts warn that any escalation threatening the Strait of Hormuz, which handles roughly 20% of global crude flows, could trigger a severe supply shock.
• The International Energy Agency projected supply to recover in coming months after a January drop and lowered its demand growth estimate.