Oil prices fall over $1 on Tuesday

Oil prices fell over $1 on Tuesday, reversing Monday’s rally, as expectations of US-Iran peace talks this week raised prospects of increased Middle East supply.

Brent crude dropped 1.1 per cent to $94.44 a barrel, while US West Texas Intermediate (WTI) fell 1.9 per cent to $87.95, with the June contract at $86.18.

The decline followed sharp gains after Iran shut the Strait of Hormuz and the United States seized an Iranian cargo ship, disrupting a key oil transit route. However, investor focus shifted to potential ceasefire talks that could ease supply risks.

Iran has yet to confirm participation, with Foreign Minister Abbas Araqchi citing ceasefire violations, while Parliament Speaker Mohammad Baqer Qalibaf said Tehran would not negotiate under pressure.

Shipping through the strait remains limited, with analysts warning prolonged disruption could push prices towards $110 a barrel, while already cutting global demand by about 3 per cent.