LONDON: Global oil prices edged lower on Monday amid volatile trading, as investors weighed a ceasefire plan proposed by Pakistan between the United States and Iran.
Brent crude futures fell 64 cents, or 0.6%, to $108.39 a barrel by 1109 GMT. US West Texas Intermediate (WTI) crude declined $1.33, or 1.2%, to $110.21 per barrel.
The modest pullback followed sharp gains in the previous session, when WTI surged 11%, and Brent rose 8% on Thursday, marking the largest single-day increase since 2020.
Markets track ceasefire proposal
The price movement came as Washington and Tehran reviewed a proposed framework aimed at ending their five-week-old conflict and reopening the Strait of Hormuz, a key route for global oil supplies.
According to multiple media reports citing sources familiar with the discussions, the plan — brokered by Pakistan — proposes an immediate ceasefire followed by negotiations on a broader settlement within 15 to 20 days.
Pakistan’s Foreign Office has confirmed that the peace process is ongoing.
The proposal, termed the “Islamabad Accord”, envisions an immediate ceasefire and the reopening of the Strait, with subsequent talks addressing long-term issues, including Iran’s nuclear programme and sanctions relief.
Iran has said it has formulated its positions and demands in response to ceasefire proposals conveyed through intermediaries.
Strait of Hormuz disruptions
The Strait of Hormuz remains largely restricted after Iranian attacks on shipping following the start of the conflict on February 28.
However, shipping data showed that some vessels have resumed transit through the waterway since Thursday.
“The market is trying to realise what to expect going forward. The most important headline this weekend has been that some ships passed through the Strait,” said Ole Hvalbye, an analyst at SEB Research.
He added that Europe continued to lose physical barrels and refined products to Asia amid tightening supply conditions.
Pakistan intensifies diplomatic efforts
The United States and Iran are assessing the ceasefire framework, according to various media reports.
The Pakistan-mediated proposal follows intensive overnight contacts involving US and Iranian officials.
Islamabad has been in continuous communication with US Vice President JD Vance, special envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araqchi, according to officials.
The plan also envisages final in-person negotiations in Islamabad and a broader regional framework to ensure the long-term security of the Strait.
Earlier, Axios reported that the US, Iranian and regional mediators were considering a 45-day ceasefire as part of a pathway towards a permanent settlement.
