Oil prices fell on Tuesday, extending losses from the previous session, on signs of some progress in restoring crude flows through the Strait of Hormuz following US-Iran peace talks.
Brent crude futures were down 44 cents, or 0.6 per cent, to $77.46 a barrel and US West Texas Intermediate was down 30 cents, or 0.4 per cent, to $73.56 a barrel at 08:13 GMT.
Prices fell more than three per cent on Monday after the United States granted Iran a 60-day sanctions waiver following initial peace talks, and as officials reported a lull in hostilities in Lebanon under a broader agreement.
The US waiver means Iran can sell crude oil across the world, not only to the usual buyers, adding to the market’s focus on supply, said Saxo Bank analyst Ole Hansen.
Oil and liquefied natural gas tankers sailed through the Strait of Hormuz on Monday, in a sign of traffic slowly picking up after Iran said it had again closed the waterway over the weekend, shipping data showed.
Two smaller crude tankers, carrying just under two million barrels of oil in total, sailed out of the strait into the Gulf of Oman on Monday, separate ship tracking data on the MarineTraffic platform showed.
The world has lost millions of barrels of oil and gas supply since the war closed the strait, a chokepoint for about a fifth of the world's oil and LNG supplies, for more than three months.
"Ship owners and operators will require assurances that the threats posed by mines have been fully eliminated. Damaged ports, debris in the water, and congestion present additional obstacles to an unconditional ramp-up in traffic," said Tamas Varga, an analyst at PVM Oil Associates.
The price declines come after a weekend that had appeared to put the week-old accord in jeopardy, including threats from US President Donald Trump to restart the war if Iran disrupted shipping again.
Elsewhere, six people were wounded in Russian airstrikes on Ukraine overnight, local authorities said, while Russia's ongoing fuel crisis deepened into parts of Siberia.
Separately, analysts in a Reuters poll expect US crude inventories to have fallen last week, along with distillate and gasoline inventories.
On Monday, government data showed US crude stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, the lowest since June 1983, as supplies tightened in the wake of the US-Iran conflict.
(Reporting by Anushree Mukherjee and Pranav Mathur in Bengaluru and Trixie Yap in Singapore. Editing by Jacqueline Wong, Shri Navaratnam and Mark Potter)