By: Economy Middle east

Oil prices slipped in early Asian trading on Tuesday as indications of potential U.S.–Iran diplomatic talks to end the conflict eased concerns about supply risks linked to the U.S. blockade of the Strait of Hormuz.

As of 8:56 UAE time, Brent crude futures fell 1.47 percent to $97.90 a barrel, while U.S. West Texas Intermediate (WTI) declined 2.35 percent to $96.75.

Both benchmarks had risen in the prior session, with Brent gaining more than 4 percent and WTI climbing nearly 3 percent, after the U.S. military began enforcing a blockade of Iran’s ports.

The U.S. military said on Monday that its blockade of the Strait of Hormuz would extend eastward into the Gulf of Oman and the Arabian Sea, while ship‑tracking data showed two vessels turning back in the strait as the restrictions took effect.

Iran responded by warning it would escalate tensions after weekend talks in Islamabad aimed at resolving the crisis collapsed.

NATO allies, including Britain and France, chose not to join the blockade, instead calling for the reopening of the strategically vital waterway.

Projecting price peaks

U.S. Energy Secretary Chris Wright suggested that oil prices could peak “in the next few weeks” once shipping through the Strait of Hormuz resumes.

The International Monetary Fund, the World Bank, and the International Energy Agency urged countries to refrain from hoarding energy supplies or imposing export restrictions amid what they described as the most severe shock ever to the global energy market.

IEA head Fatih Birol said on Monday that while additional strategic‑oil releases may not yet be required, the agency stands ready to act if conditions change.

Meanwhile, the Organization of the Petroleum Exporting Countries scaled back its forecast for global oil demand in the second quarter by 500,000 barrels per day in its latest monthly report.