World oil prices fell again after rising in early trading as the US and Iran agreed to halt attacks following the latest tensions in the Middle East.
The move raised hopes that peace talks scheduled for this week could ease the conflict and reduce the risk of disruption to global energy supplies.
Brent crude, which had previously jumped almost 2%, traded around US$72 a barrel, while West Texas Intermediate (WTI) crude remained below US$70 a barrel.
According to a US official, the two sides agreed to temporarily halt military action, thus allowing ships to return to the Strait of Hormuz more safely while peace talks continue.
Before the conflict broke out, almost 20% of the world's crude oil and liquefied natural gas (LNG) supplies were shipped through the Strait of Hormuz.
Therefore, any positive development in the negotiations is seen as able to fully reopen the strategic route and reduce concerns about global energy supplies.
Analysts also believe that the market now sees the ongoing tensions as a temporary disruption rather than a long-term threat to oil supplies.
However, the risks are not over. Last weekend, a giant oil tanker was reportedly attacked near the Strait of Hormuz after carrying about two million barrels of oil from Qatar.
The incident caused oil and gas shipments through the route to slow down again, with many ship owners still wary of passing through the area.
In other developments, a Saudi Aramco-operated helicopter crashed in Ras Tanura, a major energy hub in Saudi Arabia, but the cause of the incident and its impact on energy facilities are still unknown.
Meanwhile, Russia admitted that it was facing fuel supply problems that caused long lines at gas stations, in addition to considering a full ban on diesel exports to stabilize domestic supplies.
