Oil prices fall around 1% on Tuesday

Oil prices fell around 1 per cent on Tuesday as renewed diplomatic efforts to ease tensions between the US and Iran raised hopes of a resolution to the conflict, easing supply concerns despite fresh Houthi attacks on Saudi Arabia.

Brent crude futures declined $1, or 0.86 per cent, to $114.81 a barrel by 0418 GMT, while US West Texas Intermediate (WTI) crude fell 88 cents, or 0.86 per cent, to $100.88. Both benchmarks dropped 1 per cent earlier in the session.

Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday to ease regional tensions, agreeing to continue discussions aimed at strengthening cooperation on peace and security, Iranian state media reported.

Oil prices surged above $117 a barrel last week, reaching their highest level since April, following Iranian attacks on tankers near the Strait of Hormuz. However, renewed diplomatic efforts have prompted profit-taking, according to Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.

Despite hopes for progress, geopolitical risks remain elevated amid renewed attacks by Iran-aligned Houthis on Saudi Arabia. The Strait of Hormuz, which handled around one-fifth of global energy supplies before the conflict began in February, remains a key source of concern for oil markets.

ANZ Research said the market remained vulnerable to disruptions in supply, logistics, inventories and refining. Gulf crude exports fell for a fourth consecutive week, while oil flows through the Strait of Hormuz stood at around 60 per cent of normal levels. Global distillate inventories were also nearly 5 per cent below their five-year average.