Global oil prices slipped below the $90-per-barrel mark on Friday after U.S. President Donald Trump announced a breakthrough in negotiations with Iran, raising hopes of a de-escalation in Middle East tensions.
As at the time of writing, 06:20 a.m. (WAT), Brent crude traded at $88.45 per barrel, down 2.14%, while U.S. West Texas Intermediate (WTI) crude fell 2.00% to $85.96 per barrel.
The decline follows Trump's claim that Washington and Tehran have reached a framework agreement that could pave the way for a broader peace deal in the coming days.
Speaking from the Oval Office and later on his Truth Social platform, Trump said he had cancelled planned military strikes against Iran after discussions reportedly received approval from Iranian leaders and key regional stakeholders.
“Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have cancelled the scheduled strikes and bombings,” Trump stated.
The development marks a sharp shift from the heightened tensions that recently pushed oil prices higher amid fears of disruptions to crude supplies through the Strait of Hormuz, a critical route for global energy exports.
Market sentiment improved further after reports suggested diplomatic engagements involving the United States, Iran, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Egypt and other regional actors were progressing toward a broader agreement.
However, analysts caution that volatility could persist until a formal deal is signed, as Iran has yet to publicly endorse all aspects of the proposed framework.
For oil-importing countries lower crude prices could ease inflationary pressures across global energy markets. However, a sustained decline may also affect government revenue projections, given the country's heavy reliance on crude oil exports.
Traders are now closely watching for further details on the proposed agreement and any confirmation from Tehran that could determine the next direction of global oil markets.