Brent crude oil prices fell by 5.3% to as low as $83.6 a barrel on Tuesday. The fourth day of calm between the US and Iran contributed to the decline in oil prices.
West Texas Intermediate (WTI) crude oil fell 4.7% to $78.6 a barrel.
Last week, Brent crude oil prices had surged above $100 a barrel amid escalating US-Iran tensions.
US-Iran Tensions and Market Impact
A cautious calm has prevailed in the region since last Friday. US attacks on Iran and claims that Iran targeted US military facilities in retaliation have halted after 13 days of clashes that began on July 11.
Last June, the US and Iran signed a memorandum of understanding aimed at stopping the clashes and reaching a comprehensive agreement. However, on July 8, US President Donald Trump announced an end to the ceasefire, citing attacks on tankers in the Strait of Hormuz.
Washington demands that Iran stop attacking ships and guarantee freedom of navigation in the strait, while Tehran maintains that the transit traffic through the strait must be regulated. This has heightened international concerns over the potential impact of any escalation on global energy supplies and trade.