Oil prices fell sharply in early Asian trading as concerns over Middle East supply disruptions eased. President Trump delayed a major escalation of the U.S. military campaign against Iran while diplomatic efforts to reopen the Strait of Hormuz gained traction, according to U.S. officials cited by The Wall Street Journal.

"The crude market is taking a breather," analysts at TD Securities wrote in a research note. They noted markets appear to be pricing in hopes of a ceasefire, which has reduced the geopolitical risk premium that had supported prices in recent sessions.

WTI crude oil futures dropped 4.8% to $84.99 per barrel, while Brent crude oil futures declined 4.8% to $92.16 a barrel. The synchronized selloff reflects diminishing fears of immediate supply interruptions from the key shipping chokepoint.