**BREAKING: WTI Crude Plunges Nearly 4% on US-Iran Peace Deal Optimism**
West Texas Intermediate crude tumbled nearly 4% to around $88.90 per barrel during European trading Wednesday, reversing the previous session’s 3% rally as markets digest potential diplomatic breakthrough between Washington and Tehran. The sharp selloff reflects trader positioning around reduced geopolitical risk premium in oil markets.
The decline comes as speculation mounts over progress toward a US-Iran peace agreement, which would likely ease Middle East tensions that have kept energy markets elevated. Iran controls nearly 10% of global crude output, and any normalization of relations could eventually add significant supply to markets already navigating OPEC+ production decisions and uncertain demand outlooks.
Oil-linked currencies including the Canadian dollar and Norwegian krone are feeling pressure, while energy sector equities face headwinds on margin compression concerns. Volatility remains elevated as traders await concrete diplomatic developments.
**
FXnCO Insight
** Energy traders should monitor USD/CAD for continued upside and consider tightening stops on long oil positions until US-Iran diplomatic progress is confirmed or denied through official channels.
Source: FXStreet