Global crude oil prices declined on Tuesday, extending the previous session's losses after US President Donald Trump indicated that Washington would refrain from further military strikes against Iran for now.
The remarks eased concerns about prolonged disruptions to Middle Eastern oil supplies, although tensions around the Strait of Hormuz persisted.
Brent crude futures slipped over 1% to $91.50 per barrel, while US West Texas Intermediate (WTI) futures declined 1.24% to $85.77. Brent had fallen 5.85% on Monday after touching its lowest level since Aug 31.
Trump said military action against Iran was unnecessary at present following appeals from regional countries, including Qatar.
However, he indicated that the US naval blockade in the Strait of Hormuz would remain in place.
Despite the softer rhetoric, senior US and Gulf officials expressed doubts about an imminent peace agreement.
Iranian security council chief Mohsen Rezaei rejected reports of negotiations and reiterated Tehran's demand that Washington accept its seven conditions.
As per a Reuters survey, oil production by the Organization of the Petroleum Exporting Countries (OPEC) increased in October, supported by higher output from Saudi Arabia, Kuwait and Iraq despite export restrictions.
Meanwhile, Russian and Ukrainian officials were scheduled to begin two days of US-mediated discussions on Tuesday, their first such meeting since February.
Trump had previously suggested that a broader agreement could address the conflict and European security concerns.
Traders continued monitoring diplomatic developments and supply risks as uncertainty persisted across major oil-producing regions.
