Oil prices slumped and global stocks rallied after signs emerged that Washington and Tehran may be edging toward a framework to cool the conflict that has roiled energy markets and stoked inflation fears.

Traders reacted to reports that the United States has sent a peace proposal to Iran, while Tehran signaled it would allow “non-hostile” vessels safe passage through the Strait of Hormuz, the narrow waterway that carries about a fifth of the world’s oil and gas shipments.

Benchmark crude contracts initially plunged more than six percent, with Brent briefly slipping back below the psychologically important 100 dollar mark. Prices later pared losses but remained sharply lower after US President Donald Trump expressed optimism that a deal was within reach, saying officials were “in negotiations right now.”

Speaking in the Oval Office, Trump hinted at a breakthrough linked to Hormuz, describing an unspecified “present” from Iran that he said was “worth a tremendous amount of money” and convinced him Washington was “dealing with the right people.” He offered no details, but officials quoted in US and Israeli media said a 15 point proposal had been relayed via Pakistan.

According to those reports, the outline under discussion includes a one month ceasefire, the transfer of Iran’s enriched uranium abroad and a halt to further enrichment, in exchange for guarantees of safe passage through Hormuz, sweeping sanctions relief and assistance for Iran’s civilian nuclear program.

Tehran, in a message circulated by the International Maritime Organisation, separately pledged safe transit for “non-hostile vessels,” reinforcing hopes that the choke point might reopen to more traffic after weeks of disruption.

Equity markets across Asia surged as investors rotated back into risk assets. Indexes in Tokyo, Hong Kong, Shanghai, Seoul, Sydney, Singapore, Mumbai, Bangkok, Jakarta, Wellington and Taipei all finished higher, buoyed both by the prospect of cheaper energy and by comments from International Energy Agency chief Fatih Birol, who said he was ready to authorise further releases from strategic reserves “if and when necessary.”

Yet analysts cautioned that the military backdrop remains tense. The possible deployment of thousands of additional US troops to the region and discussions in Washington about expanding enlistment eligibility underscored that Washington is still preparing for potential escalation even as it tests diplomacy.

Meanwhile, the economic damage from the crisis is already visible. Governments from Asia to Europe have scrambled to curb fuel use, raise regulated prices or cut taxes at the pump as they struggle to shield households and businesses from the energy shock unleashed by the conflict.