US-Iran Talks Ease Oil Price Fears Amid Blockade

Oil prices fell on Tuesday as signs of possible talks to end the U.S.-Iran conflict eased supply fears. The U.S. military's blockade of Iran's ports, which began last week, was seen as a major contributor to the price increase.

Brent futures dropped 64 cents, or around 0.6%, to $98.72 at 1026 GMT, while U.S. West Texas Intermediate crude fell $2.43, or 2.5%, to $96.65. The IEA cut its forecasts for global oil supply and demand growth, with demand expected to fall by 80,000 barrels per day (bpd) in 2026.

Talks between the U.S. and Iran could resume later this week, according to five sources. However, PVM Oil Associates' analyst Tamas Varga said that the move lower ignores the loss of physical barrels of oil that are not moving. He also warned that even if talks fail, the decline in global oil inventories might spill into the third quarter and beyond.