Oil prices fell in early trading as optimism grew over potential U.S.-Iran negotiations that could ease Middle East supply disruptions. U.N. Secretary General António Guterres said talks are likely to resume after meeting with Pakistan's deputy prime minister Mohammad Ishaq Dar. The diplomatic developments come as more than 20 commercial ships passed through the Strait of Hormuz in the past 24 hours, according to U.S. officials.

West Texas Intermediate crude futures dropped 0.8% to $90.54 per barrel, while Brent crude fell 0.4% to $94.39 per barrel. The market reaction reflects growing expectations that renewed diplomatic engagement could lead to increased oil flows through key shipping routes. Iran's potential return to global oil markets would add significant supply to an already volatile energy landscape.

The price decline signals traders are pricing in the possibility of reduced supply risks in the Middle East. With global oil markets already grappling with demand concerns and production decisions from OPEC+, any easing of tensions with Iran could further pressure prices. The coming weeks will be critical as negotiations unfold and their impact on regional stability becomes clearer.