Brent crude futures, the international benchmark, dropped $1.59, or 1.5%, to $103.20 a barrel as of 1700 GMT. US benchmark West Texas Intermediate fell 63 cents, or 0.7%, to $95.83 a barrel after briefly slipping below $95, Anadolu Agency reported.
Both benchmarks lost more than 7% on Monday after Washington and Tehran signaled openness to negotiations aimed at ending the eight-month conflict.
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US President Donald Trump told reporters that an agreement with Iran was possible, while Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had authorized his government to pursue dialogue.
Qatar is seeking an interim agreement to build confidence between Washington and Tehran and pave the way for negotiations on a lasting settlement, Qatari Foreign Ministry spokesman Majed Al Ansari said on Tuesday.
Speaking at a briefing in Doha, Al Ansari said a Qatari delegation had returned from Tehran on Monday evening after holding more than three hours of talks with Iranian officials.
Both the US and Iran were reviewing proposals submitted by mediators, he said, adding that differences remained and no diplomatic breakthrough had been reached.
Iranian Foreign Ministry spokesman Esmaeil Baqaei said Tehran would not accept diplomacy based on coercion or blackmail, state news agency IRNA reported.
Oil prices had risen earlier on Tuesday following reports that US forces struck Iran’s Qeshm Island in the Strait of Hormuz on Monday. Brent briefly climbed above $107 a barrel before reversing its gains as market attention shifted back to the prospects of negotiations.
