Oil prices fell sharply as markets reacted to cautious optimism over a possible deal to end the US-Israel war with Iran.

Brent crude dropped about 5 percent, though prices remain higher than before the conflict began due to ongoing disruptions in global supply.

President Donald Trump said negotiations with Tehran were progressing but urged caution, emphasizing that any agreement must be carefully finalized.

He previously suggested a deal was “largely negotiated,” including reopening the Strait of Hormuz, a key global oil route that has been disrupted during the war, Al-Jazeera has reported.

Despite hopes for stabilization, analysts warned that supply disruptions could persist for months even if a deal is reached.