Markets price in a likely reopening of the Strait of Hormuz after U.S.-Iran de-escalation signals, weighing on crude prices.
Oil prices fell below $90 a barrel Wednesday as investors bet on a near-term resolution to U.S.-Iran tensions, reducing supply disruption risks. Iranian state media broadcast terms of a potential peace deal, shifting focus away from recent military skirmishes in the Strait of Hormuz.
The retreat follows a brief spike in geopolitical risk after U.S. forces targeted Iranian boats and missile sites. Prior sessions saw crude trade near $92 amid fears of prolonged conflict, but sentiment reversed as diplomatic signals strengthened.
Equity markets extended gains, with airline stocks leading the rally on expectations of lower fuel costs. The Nasdaq and S&P 500 closed at record highs Tuesday, supported by tech and transport sectors.