Markets staged a partial recovery on Thursday as concerns over a critical oil shipping route eased, helping reverse earlier losses across asset classes.

U.S. crude, which had surged overnight, turned sharply lower—dropping nearly $6 per barrel at one point. The pullback followed reports that Iran is working with Oman on a framework to coordinate vessel traffic through the Strait of Hormuz, a key conduit for global energy supply.

Equities reacted quickly. The Nasdaq, down about 2% earlier in the session, recovered most of those losses as fears of supply disruptions began to fade.

WTI crude had previously rallied toward $115 per barrel after President Donald Trump signaled a tougher stance on Iran, but later reversed, falling roughly $5 on news of potential cooperation over the shipping corridor.

Crypto markets tracked the broader shift in sentiment but remained under pressure. Bitcoin traded near $66,700, down around 3% over the past 24 hours, while ether hovered near $2,060 with similar losses. Both assets trimmed deeper intraday declines but stayed in negative territory.

Iranian officials characterized the proposed arrangement as a coordination measure rather than an attempt to control the waterway. Deputy Foreign Minister Kazem Gharibabadi said that even under normal conditions, ship movements through the strait should be managed in coordination with coastal states like Iran and Oman to ensure safety. He stressed that the initiative is intended to facilitate transit and enhance services, not restrict passage.

The update follows comments from Trump late Wednesday, when he warned that the U.S. would act “extremely hard” against Iran in the coming weeks and suggested the Strait of Hormuz would “open naturally” once tensions ease.

Bitcoin fell following those remarks and remains roughly 2% lower over the past day, broadly in line with declines in crypto-related equities such as Coinbase and Robinhood.