Crude oil prices fell for the second session Tuesday driven by a diplomatic push to de-escalate tensions between Saudi Arabia and Iran.
Brent crude futures, the international benchmark, were down 1.3% to $114.28 a barrel as of 10:32 a.m. ET. U.S. West Texas Intermediate futures were 1.2% lower to $100.53 a barrel.
Iran’s Supreme Leader Mojtaba Khamenei met with his top national security official Mohsen Rezaei to discuss the Islamic Republic’s conditions for ending the war with the U.S., according to a Tuesday post in English to the supreme leader’s social media account.
Khamenei and Rezaei discussed “safegaurding national and regional security by maintaining control over the Strait of Hormuz,” according to the post.
Meanwhile, Saudi Arabia’s defense minister and Iran’s President Masoud Pezeshkian held direct talks in Tehran on Monday to de-escalate tensions. Senior military and intelligence officials from Pakistan and Turkey, who are allied with the Saudis, also participated.
Saudi Arabia has come under repeated attack from Iran-allied Houthi militants in recent weeks. The Houthis have bombed energy infrastucture as well as civilian targets such as airports.
The Houthi strikes threaten to disrupt Saudi oil exports, which have proven resilient during eight months of conflict in the region.
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Iran’s Foreign Minister Esmaeil Baqaei said the talks in Tehran were a step toward regional security cooperation and further consultations are possible, according to the state media outlet Tasnim.
The diplomatic push comes as U.S. President Donald Trump said in an interview with Fox News on Sunday that he was approaching a decision on whether to strike a deal with Iran or intensify military operations, suggesting that additional attacks remained an option.
Representatives from Qatar, which has helped mediate negotiations between Washington and Tehran, also traveled to the Iranian capital on Sunday, Reuters reported.
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Prospects of a diplomatic breakthrough have helped temper fears of further disruptions to global energy supplies, putting downward pressure on crude prices.
But earlier oil price losses were limited as the prospect of a lasting resolution appeared fragile, with Iran-backed Houthi militants continuing their attacks on Saudi Arabia over the weekend.
—CNBC’s Justina Lee contributed to the report.