Iran Diplomacy Boosts Oil Prices Amid Global Supply Concerns

Oil prices fell by 1% on Tuesday as investors weighed the possibility of a pause in US strikes against Iran, raising hopes for a diplomatic solution to their conflict and the normalization of Middle East energy flows.

Brent crude futures dropped $0.54 (0.6%) to $87.82, while US West Texas Intermediate crude fell $0.66 (0.8%) to $81.95 per barrel by 0046 GMT.

The decline came after US President Donald Trump said the United States was having 'good talks' with Iran and that there was a chance of a resolution. However, he also stated that US strikes would resume if negotiations failed, while Iran issued similar comments about retaliation.

Afrah al-Zouba, foreign minister-designate of Yemen's internationally recognized Saudi-backed government, said Yemen-based Houthi fighters aimed to replicate Iran's control of shipping through the Strait of Hormuz at Bab el-Mandeb.