Global oil prices dropped by more than 4% during trading in Asian markets on Monday after reports emerged that the United States and Iran had reached a peace agreement aimed at easing tensions in the Middle East.

The decline came as investors reacted positively to expectations of improved regional stability and fewer disruptions to global energy supplies.

US West Texas Intermediate (WTI) crude fell to $80.20 per barrel, while Brent crude, the international benchmark, declined to $83.26 per barrel. The price of Murban crude from the United Arab Emirates also slipped to $83 per barrel.

According to media reports, officials from the United States and Iran are expected to formally sign the peace agreement in Switzerland on Friday. Market analysts said the development has eased concerns over the security of key oil shipping routes, particularly the Strait of Hormuz.

The strategic waterway had become a major focus for traders following heightened tensions in recent months. On February 28, global oil prices surged after reports of airstrikes by the United States and Israel on Iran raised fears of a possible closure of the Strait of Hormuz.

Those concerns disrupted market sentiment and triggered worries over potential supply shortages, as nearly a fifth of the world's oil passes through the narrow shipping route.

US President Donald Trump also signaled confidence in regional stability, saying on social media that the free flow of oil shipments would continue.

Energy experts believe that if the agreement is formally signed and maritime traffic through the Strait of Hormuz remains uninterrupted, oil prices could stabilize further in the coming weeks.