WTI Crude Oil Futures Plunge Over 7% as US and Iran Near Memorandum to End War.

TradingKey — International oil prices suffered another massive sell-off during the Asian trading session on Wednesday. This followed reports that U.S. and Iranian officials stated both sides are nearing a one-page memorandum to end the war.

Impacted by the news, WTI crude futures plummeted more than 7% intraday, breaking straight through the $100 and $98 psychological levels and hitting a low near $95. Brent crude futures slumped in tandem, also falling more than 6%. As of press time, WTI crude was trading at $95.60 per barrel, while Brent crude was at $103 per barrel.

Rising expectations for geopolitical de-escalation

U.S. President Donald Trump said Tuesday night that operations to reopen the Strait of Hormuz will be paused for a short period to observe whether an agreement can be reached and signed, noting that "significant progress" has been made on a comprehensive deal with Iranian representatives.

U.S. Secretary of Defense Pete Hegseth also stated that the ceasefire is "currently effective," while Secretary of State Marco Rubio made it clear that the offensive phase of military operations against Iran has "ended."

On the same day, Iranian Foreign Minister Abbas Araghchi departed for China as Beijing continues to mediate U.S.-Iran negotiations. Iran launched a new maritime transit management mechanism to implement unified management of vessels passing through the Strait of Hormuz, which is being interpreted by observers as a signal paving the way for a substantive relaxation of navigation controls.

Crude oil fundamentals show no signs of trend reversal.

Investors should note that while oil prices have plummeted, supply and demand fundamentals continue to tighten.

API data showed that for the week ending May 1, U.S. crude oil inventories decreased by 8.1 million barrels, gasoline inventories fell by 6.1 million barrels, and distillate inventories also dropped by more than 4.6 million barrels, with all declines far exceeding market expectations. Global crude oil inventories are approaching their lowest levels in the past eight years, leaving extremely limited room for a supply buffer.

There has been no fundamental reversal in crude oil's underlying trend; even if the strait reopens in the short term, the restoration of normal logistics in the shipping lane faces a lag due to vessel rescheduling. Previously, Goldman Sachs raised its Brent forecast for the fourth quarter of 2026 to $90 per barrel and its WTI forecast to $83 per barrel.

On a technical basis, WTI sees a concentration of support in the $95 to $98 range, while further downward pressure would depend on the genuine return of substantial supply.