Global crude oil prices witnessed a sharp decline on Wednesday, slipping over 3–4% as investors booked profits amid lingering uncertainty surrounding the ongoing West Asia conflict. The sudden drop comes despite growing signals that tensions between the United States, Israel, and Iran could ease in the near term.

Benchmark Brent crude futures fell close to the $100 per barrel mark, while U.S. West Texas Intermediate (WTI) also dropped below $98, reversing earlier gains seen during the session. The fall was largely attributed to short-term profit booking and cautious optimism over a possible de-escalation of the conflict.

Market sentiment improved slightly after indications from U.S. leadership that the military conflict could conclude within weeks. However, analysts remain wary, noting that even if hostilities subside, the damage to energy infrastructure and supply chains could keep oil prices elevated for a longer period.

A key concern continues to be the disruption in the Strait of Hormuz, a critical oil transit route responsible for nearly one-fifth of global oil shipments. Any prolonged disruption here could significantly tighten global supply and increase volatility across energy markets.

Experts also highlight that normalization of tanker movement, shipping costs, and insurance premiums will take time even after a ceasefire. This means that supply-side pressures may persist, limiting any sharp downside in crude prices in the near term.

Overall, while short-term relief has led to a pullback in oil prices, global markets remain highly sensitive to geopolitical developments. Investors are expected to stay cautious, closely tracking diplomatic progress and supply chain recovery in the coming weeks.