Oil prices plunge up to 10 per cent as US-Iran deal hopes ease Gulf tensions

Oil prices on Wednesday once again plunged as much as 10 per cent. The sudden downfall in oil prices happened after reports suggested the United States and Iran were nearing a possible agreement to end the Gulf tensions, easing fears of prolonged disruption in the Strait of Hormuz. 
West Texas Intermediate (WTI), the US benchmark, dropped as much as 10 per cent in early trading before recovering slightly to trade around USD 94.32 a barrel, according to Business Insider. Brent crude, the international benchmark, fell 7 per cent to about USD 102.14 a barrel, as per IANS.
According to a US-based media report, Brent crude on Wednesday traded around USD 103 a barrel, while WTI hovered near USD 96 a barrel as investors reacted to signs that tensions in the Gulf may be easing.
The market rally followed a report by Axios that Washington and Tehran are close to agreeing on a one-page memorandum of understanding aimed at ending the conflict that began in late February. The report said major progress could be made within the next 48 hours.
Donald Trump hints at pausing “Project Freedom”
President Donald Trump said the US was pausing “Project Freedom”, a naval operation launched earlier this week to escort commercial ships through the strait. The Wall Street Journal reported that the operation had triggered fresh Iranian attacks on merchant ships and US naval vessels in the region.
The US President, while taking it to the social media platform Truth Social, said, “Assuming Iran agrees to what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective blockade will allow the Hormuz Strait to be open to all, including Iran.” 
Trump also warned Tehran that “if they don`t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before”.
Despite the market optimism, tensions in the Gulf remained high. The Wall Street Journal reported that ships attempting to cross the Strait of Hormuz on Wednesday received warnings from Iran’s Revolutionary Guard Navy saying the waterway remained blocked.
Gold prices surge 2 per cent
While the oil prices declined by 10 per cent on Wednesday, gold prices opened higher on the Multi Commodity Exchange (MCX). The price continued to gain through the session. Gold futures opened at Rs 152,000 per 10 grams, up Rs 2,247 from the previous close of Rs 149,753, as reported by IANS.
Gold was trading at Rs 152,419, up Rs 2,666 or 1.78 per cent in the morning. During the day, it touched a high of Rs 152,450 and a low of Rs 151,653, still maintaining strong gains.
(With inputs from IANS)