Global oil prices fell sharply to a two-week low after growing optimism that the United States and Iran may be moving closer to a diplomatic agreement aimed at easing tensions in the Middle East. Brent crude futures dropped more than 5% to below $100 per barrel, while US West Texas Intermediate (WTI) crude also recorded significant losses in international trading.

Markets reacted positively to reports suggesting progress in negotiations related to reopening the Strait of Hormuz, one of the world’s most important oil shipping routes. Investors believe a potential agreement could help restore disrupted oil flows and reduce fears of a prolonged global energy crisis.

US President Donald Trump confirmed that discussions with Iran were ongoing but stated there was “no rush” to finalise a deal, while Iranian officials also signalled that negotiations were continuing despite major disagreements remaining unresolved. Analysts say easing geopolitical tensions could stabilise energy markets and lower inflationary pressure worldwide.

The recent conflict involving Iran and disruptions in the Strait of Hormuz had previously pushed oil prices above $120 per barrel earlier this year, creating concerns about fuel shortages and rising transportation costs globally. However, experts warn that even if a deal is reached, it may take months for oil production and shipping routes to fully normalise.