Brent crude fell USD 0.35, or 0.4%, to USD 88.87 a barrel by 0052 GMT Tuesday, while September West Texas Intermediate held at USD 82.47.
The prices, recorded on July 21, remained below the one-month highs reached during Monday’s volatile session.
Brent had settled at USD 89.22 a barrel after briefly reaching USD 91.42. WTI closed at USD 83.23 as traders assessed competing signals from diplomacy and continued Middle East hostilities.
A senior Iranian official told Reuters that mediators had proposed a 10-day ceasefire to revive an interim U.S.-Iran agreement signed on June 17. The diplomatic effort followed another exchange of American strikes on Iran and Iranian attacks on U.S. military assets.
Read: Brent Oil Prices Top $90 as Hormuz Traffic Slows
Supply concerns persisted after Yemen’s Iran-aligned Houthis announced an immediate maritime embargo against Saudi Arabia. The group provided few operational details but threatened Saudi access to the Bab al-Mandeb Strait, a route that usually carries about 12% of global trade.
KCM Trade chief market analyst Tim Waterer said the threat raised the risk of disruption involving another major oil exporter. IG market analyst Tony Sycamore said ceasefire discussions were limiting further short-term price gains, although the outcome remained uncertain.
A preliminary Reuters poll also indicated that U.S. crude oil and gasoline inventories likely declined during the previous week, while distillate stocks were expected to rise.
