Oil prices drop on signs of possible Iran ceasefire talks

Brent crude oil prices fell sharply on Tuesday as renewed diplomatic efforts in the Middle East raised hopes of easing tensions and reducing the risk of disruption to global energy supplies.

The international benchmark dropped by more than 3%, trading at $106.50 a barrel by 19:50 GMT, after recent gains driven by concerns over the security of oil flows through the Strait of Hormuz.

The decline came after Pakistan’s Prime Minister, Shehbaz Sharif, called on US President Donald Trump to extend a deadline related to Iran by two weeks, in a bid to allow diplomatic efforts to progress.

Mr Sharif also urged Iran to reopen the Strait of Hormuz for the same period as a gesture of goodwill, alongside a broader appeal for a temporary ceasefire across the region.

The proposal has added to expectations that a short-term diplomatic pause could be within reach. The White House told Axios that President Trump was “aware” of the initiative, adding that a response would be forthcoming.

Markets reacted to the prospect of de-escalation, with traders reassessing the likelihood of prolonged disruption to oil shipments through the Strait of Hormuz — a critical route for a significant share of the world’s energy supplies.

Pakistan is currently facilitating indirect talks between Washington and Tehran, in an effort to ease the conflict and create space for further negotiations.

While uncertainty remains, the latest developments have offered some reassurance to markets that diplomatic channels remain open.