Oil prices extended losses on Thursday, sliding around 4% to take the Brent crude benchmark below $100 a barrel on renewed hopes for a U.S.-Iran peace deal that could bring a gradual reopening of the Strait of Hormuz.

Brent crude futures were down $3.93, or 3.9%, to $97.34 a barrel at 1323 GMT. U.S. West Texas Intermediate dropped $3.95, or around 4.2%, to $91.13.

Prices remained volatile, with Brent trading in a range of up 1% to down 4.6% from the previous close. Both benchmarks slumped more than 7% on Wednesday, hitting two-week lows on optimism over a possible end to the Middle East conflict.

The U.S. and Iran are edging towards a limited, temporary agreement to halt their war, sources and officials said on Thursday, with a draft framework that would stop the fighting but leave the most contentious issues unresolved and centers on a short-term memorandum rather than a comprehensive peace deal.

Analysts also flagged a report from Saudi Arabia’s Al Arabiya news channel that said understandings have been reached to ease the U.S. blockade in exchange for a gradual reopening of the Strait of Hormuz, and another by Israel’s Channel 12 that said Iran had agreed to transfer its stockpile of 60% enriched uranium to a third country. Reuters could not immediately verify either report.

“A confirmed deal probably takes Brent back into the $80-90s quickly. A breakdown in talks or a Trump pivot back to strikes lands us immediately north of $120 a barrel,” SEB Research analyst Ole Hvalbye said in a note.

A signed memorandum of understanding might reduce the risk premium in the paper market but wouldn’t have much immediate impact on the high premiums for physical crudes, he said, adding that it would take weeks or months for the market to normalize after an agreement.

Iran had said on Wednesday that it was reviewing a U.S. peace proposal that sources said would formally end the war while leaving unresolved the key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

Earlier in the week, U.S. Treasury Secretary Scott Bessent urged China to intensify its diplomatic efforts to persuade Iran to open the Strait of Hormuz to international shipping, adding that President Donald Trump and Chinese counterpart Xi Jinping will discuss the subject when they meet next week.

“While peace negotiations are likely to continue at least until next week’s U.S.-China summit, the outlook beyond that remains uncertain,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.

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(Reporting by Robert Harvey in London, Yuka Obayashi in Tokyo and Emily Chow in Singapore. Editing by Susan Fenton and Mark Potter)