Qatar said mediators were making progress in efforts to end the US-Iran war on Tuesday, driving oil prices lower, although Tehran has denied President Donald Trump's assertion that talks are already under way.
Benchmark Brent crude fell more than 4% after the comments from Qatar, extending Monday's steep losses on hopes that an arrangement could soon be reached to restore traffic through the blockaded Strait of Hormuz.
But for now, the strait remained virtually shut, with another ship reportedly coming under attack while trying to cross it. Trump said on Monday that talks with Tehran had started and Iran faced a "last chance" to reach a deal.
Iranian officials insisted no negotiations with the United States were taking place. Iran says its only talks are with Oman about the strait, and that no major meetings were planned this week. But senior US officials struck an optimistic tone on Tuesday, with Treasury Secretary Scott Bessent and Secretary of State Marco Rubio both pointing to progress in discussions aimed at reopening the Strait of Hormuz, a corridor that normally carries about a fifth of global oil and liquefied natural gas shipments.
"There's been progress made in those talks, but not finality yet. We're hoping that will happen very shortly," Rubio told reporters at the State Department. Bessent said a deal with Iran on the reopening of Hormuz could be reached by Tuesday or Wednesday.
Qatar's foreign ministry spokesperson Majed al-Ansari said diplomatic contacts had reached "very progressive stages".
He said mediators including Qatar, Pakistan and Oman were coordinating closely to facilitate negotiations and exchange draft proposals between Washington and Tehran.
A senior Pakistani security official said: "A lot is happening in the background ... We are talking to both sides. Our sole goal at this moment is to make both parties at least agree to start talking."
Trump's comments followed his weekend decision to cancel what he described as "massive attacks" on Iran, extending a pattern in which he has threatened major military action before later backing off and pointing to diplomatic contacts.
