Global oil prices fell on Tuesday as growing optimism over a possible peace agreement between Iran and the United States eased concerns about disruptions to crude oil supplies.

The decline followed reports that a draft agreement between both countries had been submitted for review in Washington and received a positive initial assessment. The development reduced fears of escalating tensions in the Middle East, a key oil-producing region.

Investors responded by scaling back the geopolitical risk premium that had pushed oil prices higher in recent months. Earlier concerns over instability around the Strait of Hormuz, a major route for global crude exports, had contributed to a sharp rise in oil prices.

Analysts said the market is increasingly focusing on the prospect of improved diplomatic relations and more stable oil supplies. However, they warned that any setback in negotiations could quickly reverse the current trend and trigger fresh volatility in the energy market.

The drop in oil prices could have implications for Nigeria, where higher global crude prices have supported oil sector revenues but also contributed to rising fuel costs and inflationary pressures.

Industry observers noted that if the downward trend continues, consumers may eventually benefit from lower fuel prices, providing some relief to households and businesses.

Despite the recent decline, traders are expected to keep a close watch on developments in the Iran-US talks, as geopolitical events remain a major factor influencing global oil markets.