Global oil prices dropped sharply following reports of a possible understanding between Iran and the United States to extend the ceasefire and begin negotiations on Iran’s nuclear program.

According to international media reports, the price of Brent crude oil dropped to $93.7 per barrel, while WTI crude oil fell to $88.9 per barrel in global trading, The Caspian Post reports, citing Daily Ausaf.

In addition, the price of Murban crude oil also declined to $93.3 per barrel.

The decline in oil prices came after reports that negotiators from Iran and the United States had agreed on a 60-day memorandum of understanding (MoU) to extend the ceasefire and begin talks regarding Iran’s nuclear activities.

According to Axios, citing informed sources, US President Donald Trump has not yet granted final approval to the proposed understanding.

The report stated that if signed, the memorandum could become the most significant diplomatic breakthrough since the beginning of the conflict.

However, sources indicated that difficult and detailed negotiations would still be required to reach a final agreement addressing Washington’s demands regarding Iran’s nuclear programme.

Market analysts say easing tensions in the Middle East generally reduce fears of supply disruptions, leading to downward pressure on global oil prices.