US-Iran Hopes Weigh on Crude Oil Prices as Shipping Flows Improve

Crude oil prices dropped sharply on Tuesday, extending their two-day decline as hopes of improved US-Iran relations outweighed concerns about supply disruptions.

The US State Department's move to return diplomats to Middle Eastern embassies evacuated before and during the conflict was seen as a sign that tensions between the US and Iran might ease.

Russian state-owned media reported an alleged Iran-US ceasefire agreement involving free navigation through the Strait of Hormuz, although this remains difficult to verify.