Global oil prices fell on Wednesday as ongoing negotiations between the United States and Iran raised hopes of easing tensions in the Middle East.

Brent crude declined to about $105 per barrel from $111 recorded the previous day, while US benchmark WTI crude dropped to $98 from $105, reflecting improving market sentiment over the diplomatic talks.

US President Donald Trump said discussions with Iran were approaching the final stage, although he warned that further attacks could occur if an agreement is not reached.

Iran also indicated readiness to cooperate with Gulf nations on measures to improve maritime safety and shipping operations in the region.

Despite the price decline, analysts remain cautious over the possibility of continued supply disruptions in the Middle East. Some energy experts believe crude prices could still rise above $120 per barrel if tensions persist or worsen.

Concerns remain high over shipping activities through the Strait of Hormuz, one of the world’s most important oil transit routes. Several supertankers carrying millions of barrels of crude oil reportedly crossed the strait this week after being stranded in the Gulf for more than two months due to the conflict in the region.

Shipping traffic through the strait remains significantly below normal levels. Before the conflict began, more than 100 vessels passed through the route daily, but current traffic has fallen sharply as security concerns continue to affect global energy supply chains.

Analysts say any prolonged disruption to oil exports from the Gulf could tighten global supply and trigger another spike in prices, even as diplomatic talks continue.