Oil prices softened on Tuesday as traders weighed mediation efforts between the U.S. and Iran against new attacks and the Houthis’ naval blockade threat.
Brent crude futures fell 35 cents, or 0.4%, to $88.87 per barrel by 0052 GMT, while U.S. West Texas Intermediate for September delivery stayed at $82.47 a barrel. Both were below their highs from the previous session.
Yemen’s Iran‑aligned Houthis announced on Monday they would block Saudi shipping, a move that could open a new front against the U.S. and threaten global energy supplies beyond the Gulf.
Tim Waterer, chief market analyst at KCM Trade, said the blockade threat raises the risk of disrupting a major oil exporter.
Meanwhile, a senior Iranian official told Reuters that Tehran had received a proposal for a 10‑day ceasefire from mediators, aiming to revive the June 17 interim deal that could lead to a lasting agreement to end the war that began on February 28 after U.S.‑Israeli attacks on Iran.
The diplomatic push followed another night of U.S. strikes on Iranian cities and attacks by Iran’s Revolutionary Guards on U.S. military assets. Later, U.S. Central Command said it had begun another round of strikes on Iran.
IG market analyst Tony Sycamore said oil had already risen significantly and could go higher, but short‑term upside is capped by current talks of de‑escalation and peace talks, whose outcome remains uncertain.
A preliminary Reuters poll on Monday suggested U.S. crude oil stockpiles fell last week along with gasoline, while distillate stocks likely rose.