International benchmark Brent crude futures fell 4.52% to $98.71 per barrel, while U.S. West Texas Intermediate futures declined 3.72% to $88.89 per barrel on Wednesday. The price moves followed comments from President Trump indicating a shift away from earlier threats to strike Iranian energy infrastructure.<\/p>\n
Speaking from the Oval Office, Trump said he had pulled back from his prior threat \u201cbased on the fact we\u2019re negotiating.\u201d He added that Iranian counterparts were \u201ctalking to us, and they\u2019re talking sense,\u201d though Iran has publicly denied engaging in direct talks with the United States.<\/p>\n
Later on Tuesday, The New York Times, citing two unnamed officials, reported that the U.S. had sent Iran a 15-point proposal intended to help end the war. The proposal was reportedly delivered through Pakistan. According to the report, it is unclear how widely the plan has been circulated within the Iranian leadership and whether Israel, which is carrying out attacks on Iran alongside the U.S., would support it.<\/p>\n
Despite the price decline, indications from Iranian military leadership suggest continued uncertainty for oil markets. A spokesperson for Iran\u2019s top joint military command warned that prices would not normalize until regional stability is secured under its military control, signaling expectations of ongoing volatility.<\/p>\n
Goldman Sachs co-head of global commodities research Daan Struyven described the current disruption to oil supplies as the largest shock in decades when measured as a share of global supply. The bank observed that near-term crude price movements are being driven less by changes in the base case outlook and more by shifts in the perceived probability of worst-case scenarios.<\/p>\n
According to Goldman Sachs, crude is effectively trading on a geopolitical risk premium, as investors hedge against the possibility of prolonged supply disruptions and critically low inventories. The bank\u2019s base case assumes that oil flows through the Strait of Hormuz will normalize in April over a four-week period.<\/p>\n
Why did oil prices fall on Wednesday?<\/strong> How much did Brent and WTI crude decline?<\/strong> What is Goldman Sachs\u2019 view on the current oil disruption?<\/strong> What does Goldman Sachs assume about flows through the Strait of Hormuz?<\/strong>
Oil prices fell after President Trump indicated that the U.S. and Iran are \u201cin negotiations right now\u201d and suggested Iran wants a peace agreement, prompting markets to reassess geopolitical risk and the likelihood of imminent military escalation.<\/p>\n
Brent crude futures fell 4.52% to $98.71 per barrel, while U.S. West Texas Intermediate futures declined 3.72% to $88.89 per barrel.<\/p>\n
Goldman Sachs characterizes the current disruption as the largest oil supply shock in decades relative to global supply and notes that prices are being driven by a geopolitical risk premium, with investors focused on worst-case scenarios rather than changes in the base case outlook.<\/p>\n
The bank\u2019s base case assumes that oil flows through the Strait of Hormuz will normalize in April over a four-week period.<\/p>\n