Oil prices eased on Wednesday as signs of progress in US-Iran peace negotiations eased fears of a prolonged supply disruption in the Middle East.
Brent crude slipped to $105 per barrel, down from $111 recorded on Tuesday, while West Texas Intermediate fell to $98 from $105, according to data from Oilprice.com.
The decline followed comments by US President Donald Trump, who said negotiations with Iran had reached their final stage, though he warned that further military action remained possible if Tehran failed to agree to a deal.
Iran also signalled a willingness to cooperate on maritime safety, with Foreign Ministry spokesperson Esmaeil Baghaei saying Tehran was prepared to work with neighbouring coastal states to develop protocols for secure shipping routes.
Despite the diplomatic progress, uncertainty continues to hang over the global oil market.
Analysts say concerns about tight supply conditions and the fragile security situation in the Middle East are keeping traders cautious, even as talks advance.
Some market observers believe oil prices could rebound sharply if disruptions persist, with forecasts placing Brent crude at about $120 per barrel in the near term.
Energy consultancy Wood Mackenzie projected an even steeper rise, warning that prices could approach $200 if the Strait of Hormuz remains largely closed through the end of the year.
Meanwhile, shipping activity through the strategic waterway showed signs of gradual recovery.
Reuters reported that three supertankers carrying about six million barrels of Middle East crude crossed the Strait of Hormuz on Wednesday after remaining stranded in the Gulf for more than two months. Another vessel was also reported to be entering the route.
The tankers were among a limited number of vessels leaving the Gulf under a transit arrangement reportedly directed by Iran.
The US-Israel conflict with Iran, which erupted on February 28, has severely disrupted movement through the Strait of Hormuz, a channel responsible for transporting nearly one-fifth of global oil and energy supplies.
Data from Kpler and LSEG showed that the South Korean-flagged tanker Universal Winner, loaded with two million barrels of Kuwaiti crude, was among vessels exiting the strait and heading to South Korea.
Before the conflict, between 125 and 140 vessels crossed the strait daily. In recent days, however, traffic has dropped sharply to roughly 10 ships entering and leaving the route each day, including cargo vessels, chemical tankers and liquefied petroleum gas carriers.
Analysts say if the current downward trend in crude prices continues, consumers could eventually see lower fuel prices in many markets, including Nigeria.
