Oil prices fell about 4% on Tuesday to fresh three-month lows as markets weighed prospects for a resumption of supplies through the Strait of Hormuz alongside weaker physical demand and scant details on a preliminary deal to end the Iran war.
Brent crude futures were down $3.20, or 3.85%, at $79.97 a barrel at 1253 GMT. They earlier touched $79.61, the lowest since March 3, and the first time they have fallen below $80 since that day.
US West Texas Intermediate was down $3.52, or 4.36%, at $77.23 a barrel. WTI's intra-day nadir of $76.88 was the lowest since March 10.
Before the war started on February 28, Brent and WTI futures were trading around $65-70 per barrel.
Oil prices sank nearly 5% on Monday after US President Donald Trump announced an interim deal to end the US-Israeli war with Iran, though full details have not been released.
Iranian Foreign Minister Abbas Araqchi said on Tuesday that Iran and the US would start a new round of talks in Switzerland on Friday to reach a final agreement.
"Near-term downside risks remain as the market prices a faster reopening of the Strait and a return of stranded barrels," Saxo Bank analyst Ole Hansen said.
However, depleted inventories, seasonal demand, strategic stock rebuilding and lingering geopolitical uncertainty suggest the path back to pre-war prices may be far less straightforward than current market optimism implies, Hansen said.
