Global oil prices declined on Thursday, with crude slipping below the $95-per-barrel mark as markets reacted to growing speculation that the ceasefire between the United States and Iran could be extended.

The fall in prices came after reports suggested ongoing diplomatic efforts between Washington and Tehran may help prevent further escalation in the Middle East conflict, which has disrupted global energy markets over the past several months.

Brent crude, the international oil benchmark, dropped below $95 per barrel during trading, while US crude futures also registered losses. Analysts said investor sentiment improved amid expectations that tensions around the Strait of Hormuz - a critical global oil shipping route - may ease if ceasefire talks continue.

The Strait of Hormuz handles nearly one-fifth of the world's oil and liquefied natural gas supplies. Concerns over disruptions in the region had previously pushed crude prices sharply higher after the US and Israel launched strikes on Iran earlier this year, triggering retaliatory threats from Tehran.

Market participants are now closely monitoring diplomatic negotiations between the two countries after reports indicated discussions were underway to maintain the fragile ceasefire and stabilise maritime activity in the Gulf region.

Oil prices had surged close to $120 per barrel at the peak of the conflict due to fears of prolonged supply disruptions and possible closure of the Strait of Hormuz. However, recent signs of de-escalation and hopes of uninterrupted shipping movement have helped cool prices in global markets.

Despite the decline, analysts cautioned that crude prices may remain volatile as geopolitical tensions in the Middle East continue to evolve. Any fresh military action or disruption to shipping routes could again impact energy markets and global fuel costs.