Crude oil futures settled higher on Thursday, reversing an early sell-off driven by expectations of a U.S.-Iran peace deal and a potential reopening of the Strait of Hormuz.

Crude oil futures slipped Thursday morning, extending Wednesday's sell-off triggered by signs the U.S. and Iran are closing in on a peace deal which would reopen the Strait of Hormuz.

Energy markets tumbled for a second consecutive session Wednesday, driving U.S. crude futures briefly below $90 bbl, amid reports that the U.S. was ready to end its war with Iran and lift the blockade on Iranian ports as well.

Crude oil futures plummeted by as much as 12% Wednesday morning, hitting to two-week lows on signs of an imminent diplomatic resolution to the U.S.-Israel and Iran war, which has been disrupting a fifth of global oil supply for more than two months.

Energy markets fell Tuesday on relative calm in the Middle East after an exchange of fire a day ago between U.S. and Iranian forces in the Strait of Hormuz, as well as a drone strike that left a UAE petroleum complex in flames.

Oil and product futures fell Tuesday morning on U.S. attempts to clear the Strait of Hormuz blocked by Iran as ramped up hostilities kept the key waterway for energy markets at the front and center of the Middle East conflict.

Energy markets rallied anew Monday, driving crude futures up 6%, after an Iranian drone attack on a petroleum complex in the United Arab Emirates stoked new fires in the Middle East conflict.