Oil Prices Fall 1.7% on US-Iran Diplomacy Hopes

Oil prices declined in early Asian trading on Tuesday, with West Texas Intermediate crude falling 1.97% to $80.98 per barrel and Brent crude dropping 1.77% to $86.80 per barrel. The decline followed remarks from US President Donald Trump indicating Washington was engaged in "good talks" with Iran, signalling potential for diplomatic resolution.

Iranian officials also confirmed discussions were underway, though both sides noted military action could resume if negotiations falter. Despite the recent pullback, crude prices remain elevated due to concerns over Middle East supply disruptions, particularly shipping risks in the Red Sea and around the Bab el-Mandeb Strait amid Houthi movement activities.

Weaker global demand has also pressured prices. The US Energy Information Administration reported rising crude inventories, with analysts noting that sustained high oil prices are beginning to dampen consumption patterns.