Global oil prices extended losses on Thursday, with Brent crude falling below the $99 mark as growing expectations of a potential diplomatic agreement between the United States and Iran continued to weigh on market sentiment.
As of 11:30 a.m. WAT, Brent crude declined by 2.35 per cent to $98.89 per barrel, while West Texas Intermediate (WTI) dropped by 2.48 per cent to $92.72 per barrel.
The latest decline comes as traders increasingly price in the possibility of easing tensions in the Middle East, particularly around the Strait of Hormuz, a strategic shipping route responsible for a significant share of global crude exports.
Market sentiment shifted following reports that Washington proposed a framework aimed at reopening the Strait of Hormuz and easing restrictions linked to the ongoing conflict. Although no formal agreement has been reached, the prospect of renewed negotiations has reduced fears of prolonged supply disruptions.
The losses follow a steep selloff earlier in the week, when oil prices plunged after signals emerged that both countries may be moving closer to diplomatic engagement.
Analysts say investors are gradually unwinding the geopolitical risk premium that previously drove prices sharply higher during heightened tensions in the Gulf region.
Despite the decline, uncertainty remains over the pace and outcome of any negotiations. Iranian officials have indicated that unresolved issues, particularly surrounding the country’s nuclear programme, remain major sticking points.
Earlier remarks by Donald Trump also suggested that direct negotiations may still be premature, adding to uncertainty in the market.
At the same time, supply concerns have not fully disappeared. Ongoing restrictions around the Strait of Hormuz, alongside tightening crude inventories in the United States and other key markets, continue to provide underlying support for prices.
Energy analysts note that buyers have increasingly relied on alternative crude supplies, particularly from the United States, as disruptions in Middle Eastern flows persist.
While the market is currently reacting to expectations of de-escalation, traders remain cautious, with oil prices expected to stay volatile as diplomatic and geopolitical developments continue to unfold.