Oil Prices Slide 1% as US-Iran Tensions Ease

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

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

The price drop was attributed to 'good talks' between the US and Iran, with US President Donald Trump saying there's a chance of a resolution. However, he also warned that strikes would resume if negotiations failed.

Marex analyst Edward Meir noted that demand destruction in Asia is a key reason prices aren't higher than they are now, while Barclays analysts pointed out that flows through the Strait of Hormuz remain subdued, averaging 2.9 million barrels per day last week compared to 5.9 million in the previous week.