Oil prices experienced a significant decline of around 3% on Tuesday, with Brent crude futures falling to $110.61 per barrel and U.S. West Texas Intermediate crude futures dropping to $102.19. This drop was largely attributed to signs of a recovery in shipping activity in the Strait of Hormuz, a critical oil transit route, and the confirmation of a ceasefire between the United States and Iran. Traders reacted by removing part of the risk premium that had previously inflated prices, as the U.S. reported a safe passage for vessels through the strait, easing fears of supply disruptions. Despite these developments, analysts caution that the situation remains fragile, and any escalation in conflict could lead to renewed price increases. The market is now closely monitoring upcoming inventory data from the American Petroleum Institute and the U.S. Energy Information Administration, which could influence future price trends. If inventory levels show a decline, prices may rise again, while an increase could lead to further drops.