Oil prices drop over 3% on hopes for renewed US-Iran talks

Oil prices declined more than 3% on Friday as renewed hopes for a possible deal between the US and Iran eased market concerns over prolonged supply disruptions in the Middle East.

Brent crude futures fell more than 3% to near $96 a barrel as of 1120GMT, while US benchmark West Texas Intermediate (WTI) futures dropped 3.6% to around $91.2.

The decline came after oil prices rose by around 4.5% to near $100 in the previous session, when markets reacted to persistent geopolitical risks and concerns over the impact of regional tensions on energy flows.

Sentiment shifted after US President Donald Trump said Washington was "very close" to reaching a deal with Iran as the current two-week ceasefire approaches its expiration.

Trump said such an agreement would push oil prices and inflation lower, and added that the next round of direct talks could take place "maybe over the weekend."

The decline also came amid growing expectations that tensions in the region could ease more broadly after Israel and Lebanon agreed to begin a 10-day ceasefire starting at 2100 GMT on Thursday following talks in Washington.

Despite the drop, prices remained elevated as traders continued to monitor uncertainty surrounding the Strait of Hormuz and the prospects for a lasting agreement between Washington and Tehran.