Oil prices fell to a three-week low on Tuesday as senior US officials raised hopes of a deal with Iran to reopen the key Strait of Hormuz waterway.
US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent both announced talks had progressed to allow shipments through the Strait of Hormuz to potentially resume as soon as Tuesday or Wednesday.
The cost of a barrel of brent crude, the global benchmark for oil prices, fell by almost 5 per cent to under $80 on the news of supply disruptions potentially being eased.
But the failure of previous negotiations in recent months to de-escalate the conflict between the US and Iran has led to a volatile oil market, with drivers ultimately being hit by higher fuel prices at the pumps.
On Tuesday, along with the drop in Brent crude, US West Texas Intermediate prices were down more than 5 per cent, to $76 a barrel.
Both contracts dropped to their lowest levels since July 13.
US Secretary of State Marco Rubio said there had been progress made in discussions on getting more ships through the Strait with Iran and Oman.
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