West Texas Intermediate (WTI) futures fell approximately 2% to near $93 a barrel. This decline follows reports that a U.S. delegation will travel to Pakistan this weekend for negotiations with Iranian officials.
The de-escalation talks aim to resolve military tensions in the Strait of Hormuz. These tensions recently pushed crude prices to multi-year highs.
Diplomatic progress is reducing the geopolitical risk premium that previously inflated oil prices. Successful negotiations could restore energy flows through the shipping lane.