Global oil prices declined by about 1% on Tuesday as investors assessed the possibility of a diplomatic breakthrough between the United States and Iran. Brent crude futures fell by 54 cents, or 0.6%, to $87.82 a barrel. US West Texas Intermediate crude dropped 66 cents, or 0.8%, to $81.95 a barrel. Both benchmarks had fallen by around 1% earlier in the session. They reached their lowest levels in more than a week. The decline came after US President Donald Trump said Washington was engaged in positive talks with Iran. He also indicated that a settlement could be possible. However, Trump warned that US strikes could resume if negotiations fail. Iran has also indicated that it would respond to further attacks. The possibility of diplomatic progress has reduced some concerns about disruptions to oil supplies from the Middle East. Analysts said the market remained highly uncertain. Any breakdown in negotiations could quickly push oil prices higher. Concerns about attacks by Yemen-based Houthi fighters have also influenced the market. Officials in Yemen have warned that the Houthis could seek to disrupt shipping through the Bab el-Mandeb Strait. The waterway is an important route for international energy shipments. Market analysts remain uncertain about whether the Houthis have the ability to impose a complete blockade. However, shipping activity in the Red Sea and nearby waters has already declined significantly. The Strait of Hormuz is another major concern for energy markets. It is a key route for global oil shipments. Recent data showed that oil and refined product exports through the strait had dropped sharply. Net exports averaged around 2.9 million barrels per day in the week ending July 24. The figure was nearly 5.9 million barrels per day during the previous week. The lower shipping volumes have added to concerns about global energy supplies. However, analysts said weaker demand was also preventing oil prices from rising further. Demand in Asia has been particularly affected. Slower consumption could reduce pressure on the global oil market. Investors are also watching US energy inventory data. A preliminary market survey indicated that US crude oil stocks probably declined last week. Gasoline inventories were also expected to fall. Distillate stocks, which include diesel and heating oil, were estimated to have increased. The market is now closely following developments in US-Iran talks. A successful diplomatic agreement could reduce fears about supply disruptions and support the normal flow of energy shipments. A breakdown in negotiations, however, could revive concerns over attacks and shipping disruptions.

Oil prices climbed on Monday as uncertainty over a possible diplomatic breakthrough between the United States and Iran increased, while a sharp slowdown in tanker movements through the Strait of Hormuz heightened concerns about disruptions to global crude supplies. Brent crude futures gained as much as 1% during early trading to reach $89.40 per barrel. The benchmark was later up 72 cents, or about 0.8%, at $89.20 a barrel by 0229 GMT. US West Texas Intermediate (WTI) crude also moved higher, rising 44 cents to $82.83 per barrel. Both international benchmarks posted gains of more than 5% last week after a series of attacks involving energy and shipping assets in and around the strategically important Strait of Hormuz. The incidents have intensified fears that further escalation could affect one of the world’s most important oil transit routes. Market sentiment was further affected by developments over the weekend, when Iranian Foreign Minister Abbas Araqchi said Tehran had yet to decide whether it would resume negotiations with Washington. US President Donald Trump, meanwhile, told Americans to prepare for somewhat higher gasoline prices as the conflict continues. Analysts said the renewed uncertainty had brought geopolitical risk back into crude markets after oil prices had previously come under pressure on expectations that diplomatic efforts could ease tensions. “Oil prices have now rebounded almost completely from the lows seen in early August, as hopes for a more permanent resolution between the US and Iran have faded and geopolitical risk premiums have returned to the market,” said Priyanka Sachdeva, head of market insights at Phillip Nova in Singapore. Sachdeva cautioned, however, that the rally could lose momentum unless there is evidence of a further deterioration in the situation. She said the market would need to see renewed aggression in the Strait of Hormuz, particularly significant damage to oil tankers or energy infrastructure, before prices were likely to move substantially higher. Hormuz shipping activity slows Concerns over physical supply disruptions increased after ship-tracking data showed a marked decline in vessel traffic through the Strait of Hormuz over the weekend. According to data from Kpler, only five commodity vessels crossed the strategic waterway on Saturday, while no such transits were recorded on Sunday. This compared with 31 commodity vessel crossings during the previous weekend. The slowdown is significant because the Strait of Hormuz is a critical route for international energy shipments. Any prolonged disruption could increase transportation risks, raise insurance costs and place additional upward pressure on crude prices. The United Arab Emirates also accused Iran of attacking another vessel operated by Abu Dhabi National Oil Company (ADNOC) while it was passing through the strait on Friday, according to the Emirati state news agency WAM. The UAE had earlier blamed Iran for two separate incidents involving ADNOC-operated vessels on Thursday evening. The latest incidents have added to concerns among traders that the conflict could increasingly affect commercial shipping and energy infrastructure, rather than remaining confined to military and diplomatic confrontation. Markets remain focused on escalation risks The Strait of Hormuz remains particularly important to global oil markets because a substantial volume of crude and petroleum products moves through the waterway. Any sustained interruption could therefore have consequences well beyond the region. For now, traders are closely monitoring developments involving US-Iran diplomatic contacts, attacks on shipping and the movement of tankers through the strait. While the latest price gains reflect a higher geopolitical risk premium, analysts remain cautious about predicting a prolonged rally. If shipping activity resumes and diplomatic channels reopen, some of the premium built into crude prices could quickly unwind. Conversely, additional attacks on tankers, oil facilities or other critical infrastructure could trigger a stronger market reaction and push prices higher as traders reassess the security of regional supplies.