Global crude oil prices fell on renewed hopes of easing tensions in the Middle East after reports emerged that the United States and Iran had reached a tentative agreement to extend their ceasefire and reopen shipping through the strategic Strait of Hormuz.
As at the time of writing 04:39 am (WAT), Brent crude dropped 1.11 per cent to $92.67 per barrel, while US West Texas Intermediate crude declined 1.41 per cent to $87.65, as traders reacted to signs of possible progress in negotiations between Washington and Tehran.
According to reports, the proposed arrangement would extend the ceasefire by 60 days and guarantee unrestricted movement through the Strait of Hormuz, a critical energy corridor that handles roughly one-fifth of global oil and liquefied natural gas supplies.
The market downturn reflects growing optimism that a prolonged disruption to oil flows from the Middle East could be avoided if both governments approve the framework agreement.
However, uncertainty still surrounds the deal. US President Donald Trump is yet to give final approval, while Iranian media reported that the agreement had not been formally concluded.
“We’re not there yet, but we’re very close and we’re going to keep on working at it,” US Vice President JD Vance said, underscoring the fragile state of the negotiations.
Despite the diplomatic momentum, military tensions remain elevated. Recent exchanges involving drone interceptions, missile activity, and retaliatory strikes highlighted the volatility of the region and the risk of renewed pressure on global energy markets.
Analysts said crude prices are responding not to a completed peace agreement, but to expectations that a functioning ceasefire and restored shipping access could ease fears over supply bottlenecks and geopolitical risk premiums.