Oil prices sank about 5% on Wednesday after reports the United States had sent Iran a 15-point proposal aimed at ending the war, prompting talk of progress toward a ceasefire and despite Israel and Iran exchanging airstrikes.Brent crude futures was down $6.08, or 5.82%, to $98.41 a barrel by 1200 GMT, off a session low of $97.57. U.S. West Texas Intermediate crude futures were down $5.09, or 5.51%, at $87.26, off a low of $86.72.Both benchmarks rose nearly 5% on Tuesday, before paring gains in volatile post-settlement trading.“The latest 15-point plan proposed by the U.S. administration still has to be reviewed and responded to, but considering the disruption timeline, it appears a faster and smoother resolution is being explored,” said Rystad analyst Janiv Shah.“The elevated state appears to be the new norm for the oil market considering where the supply and demand balances and loss in fundamentals lies, but the rhetoric is heavily geopolitically driven.”Iran has denied that direct talks had taken place and an Iranian military spokesman said the United States is negotiating with itself, .If Iran remains a threat to Hormuz the world could face years of $100-$150 per barrel oil, Larry Fink, head of Blackrock, the world’s largest asset manager, told the BBC.”We will have global recession,” Fink said, when asked if oil stays at $150.OIL SHIPMENTS VIA HORMUZ LARGELY HALTEDPhillip Nova’s senior market analyst Priyanka Sachdeva said Middle East developments would remain the “dominant price driver” keeping oil prices moving in a wide range in the near term.The war has all but halted shipments of oil and liquefied natural gas through the Strait, which typically carries about one-fifth of the world’s gas and crude supply. The International Energy Agency has called it the biggest-ever oil supply disruption.The result is a daily loss of around 20 million barrels crude, meaning after 25 days a loss of some 500 million barrels, or 5 full days, of global supply.“The market outlook remains tight notwithstanding the prospects of a war off-ramp,” said Saul Kavonic, head of energy research at MST Marquee.He said that even if flows through the strait resume, “it’s not clear all shut-in production will resume until there is more clarity on the durability of a ceasefire.”Iran has told the United Nations Security Council and the International Maritime Organization that “non-hostile vessels” may transit the Strait of Hormuz if they coordinate with Iranian authorities, according to a note seen by Reuters on Tuesday.To offset the Hormuz disruptions, oil exports from Saudi Arabia’s Red Sea Yanbu port rose to nearly 4 million barrels per day last week, a sharp increase from before the war broke out, shipping data showed.Meanwhile, Russia’s Baltic ports of Primorsk and Ust-Luga, major export terminals, suspended crude oil and oil products loadings on Wednesday after Ukrainian drone attacks sparked a blaze which could be seen from Finland, two sources told Reuters.It was one of the largest strikes against Russia’s oil export facilities in the four-year war and will add to the uncertainty on the global oil market.