08:48 AM EDT, 03/25/2026 (MT Newswires) -- Oil prices weakened early Wednesday, dropping more than 5% after the United States offered a 15-point ceasefire plan to end its war on Iran, raising hopes for an end to a war that has caused the largest supply disruption in history.

West Texas Intermediate crude oil for May delivery was last seen down US$4.85 to US$87.50 per barrel, while May Brent oil was down US$5.69 to US$98.80.

The drop comes as the United States sent a ceasefire plan for the war to Iran via Pakistan, calling for Tehran to dismantle its nuclear sites and re-open the Strait of Hormuz to shipping. Reuters reported U.S. President Trump said negotiations were making progress, though Iran denies talks are underway as attacks on its Persian Gulf neighbors, as well as U.S.-Israeli strikes, continue.

"The US President announced a postponement to the threat of US strikes on the Iranian power grid after productive negotiations with Tehran. In complete denial, the Speaker of Iran's Parliament, Mohammad Ghalibaf, said no such discussions had taken place, calling it "fake news."

The war has halted shipping through the Strait of Hormuz, the chokepoint for about 20% of daily oil supply from Persian Gulf nations, as well as other key commodities, like LNG and fertilizer. The supply shock has boosted oil prices globally.

While the war risk premium continues to ebb and flow, underlying tightness across key commodities - from crude and refined fuels to gas, helium, and fertilizers - is building, as most tankers that set sail before the disruption have now reached their destination and discharged their cargo

Despite the loss of Gulf supplies, a report showed U.S. oil inventories are on the rise. In its weekly survey, the American Petroleum Institute reported inventories last week rose by 2.3-million barrels last week, while the consensus estimate expected a drop of 1.3-million barrels, according to Investing.com. The Energy Information Administration will release official inventory data later on Wednesday morning.