Iran Diplomacy Weighed by Oil Market Amid Pause in US Strikes

Oil prices fell on Tuesday as investors weighed the implications of a potential pause in US strikes on Iran.

The Brent crude futures contract dropped $0.54, or 0.6 per cent, to $87.82 by 0046 GMT, while U.S. West Texas Intermediate crude was at $81.95 a barrel, down $0.66, or 0.8 per cent.

US President Donald Trump said on Monday the United States was having 'good talks' with Iran and that there was a chance of a resolution, but he also warned that US strikes would resume if negotiations failed.

Afrah al-Zouba, the foreign minister-designate of Yemen's internationally recognised 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.