Oil prices fall below $93 as U.S.–Iran ceasefire talks ease supply fears

Global oil prices declined sharply on Friday, with Brent crude slipping below the $93 mark as markets reacted to progress in diplomatic talks between the United States and Iran aimed at extending a ceasefire and stabilising maritime activity in the Strait of Hormuz.

The downturn puts crude on track for its steepest weekly decline in nearly two months, driven largely by easing geopolitical tensions that had previously pushed prices above $100 per barrel earlier in the year.

International benchmark Brent crude fell by about 1.1% to $92.67 per barrel, marking a weekly loss of more than 10%. U.S. West Texas Intermediate (WTI) crude also dropped 1.4% to $87.64 per barrel, recording a weekly decline of over 9%.

The decline reflects a broader unwinding of the so-called geopolitical risk premium, as traders respond to reports of advancing negotiations between Washington and Tehran on a proposed 60-day framework agreement.

According to diplomatic sources, the proposed arrangement seeks to extend the current ceasefire and gradually restore stability in the Strait of Hormuz, a critical global energy corridor responsible for a significant share of global oil and gas shipments.

Key elements under discussion reportedly include the reopening of maritime routes through the strait, a phased easing of naval restrictions, and limited sanctions relief that would allow Iran to increase crude exports under monitored conditions.

The Strait of Hormuz remains one of the world’s most sensitive shipping chokepoints, and any easing of tensions in the region typically has an immediate impact on global energy markets.

The price drop has also raised expectations of potential relief for fuel-importing countries such as Nigeria, where domestic fuel prices are closely tied to international crude benchmarks and foreign exchange fluctuations.

Since the removal of fuel subsidies and full deregulation of the downstream petroleum sector, Nigerian consumers have experienced significant increases in pump prices, largely driven by global oil costs and import expenses.

Analysts say sustained declines in Brent crude could eventually translate into lower domestic fuel prices if the trend continues, though currency pressures and refining costs remain key variables.

Despite the current downturn, energy analysts caution that global supply conditions remain fragile following months of geopolitical disruptions that have reduced stockpiles and increased market sensitivity to any renewed conflict risks.

Market observers note that while optimism around a potential deal is driving prices lower, volatility is likely to persist until a formal agreement is signed and implemented.

For now, traders are closely watching developments in the U.S.–Iran negotiations, with expectations that any confirmed deal could further extend the downward pressure on global crude prices heading into the peak summer demand season.